YOU probably know that home insurance is essential for any buyer – but did you know that even small changes to your home or circumstances can invalidate your insurance?
Getting an extension, going away on a long holiday or taking in a lodger can all affect the cost of your insurance premiums.
So failing to inform your supplier could cost you thousands of pounds if you need to claim.
David Fowkes, head of household underwriting at Admiral Insurance, says claims can cost anywhere into the hundreds of thousands so urges customers to keep their insurers up to date on any changes to their circumstances.
He says to be particularly mindful of anything that would change the answers to questions specifically asked by your insurer when you took out the policy.
But as a rule of thumb it’s always best to give your supplier a call if you’re not sure whether a change could affect your home insurance.
How much an insurer is willing to pay out on a claim made after a change in circumstances depends on whether they would have continued to cover the property if they had been informed.
“The insurer will look at what they would have done if they’d known the full facts,” David explains.
“If they wouldn’t have taken out the policy in the first place they could decline the claim completely and invalidate the cover.
“If they would have taken the policy on, but charged a higher premium, then they can proportionally reduce the claim payment by the same amount the premium was underpaid by.”
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This means if your insurance costs £100 a month but the change in circumstances would’ve doubled that to £200, the insurer can pay out just half of the claim cost.
So what are some changes that might affect your insurance? David has outlined seven examples.
Going on a long holiday
Insurers usually have a set amount of time a property can be unoccupied for, so spending lots of time away can invalidate your insurance.
David says Admiral allows customers to leave a property unoccupied for 60 days, but this number varies between insurance companies.
At Admiral, an unoccupied home is defined as one which isn’t lived in by the policyholder or their family members for longer than the “days unoccupied limit” on their home policy schedule.
This can be as few as five days between November and March, unless your home is constantly heated to 12°C or your water supply is turned off at the mains and the water system drained.
David says: “Many polices have a limit of between 30 and 60 days so if, for example, you are planning to take a long holiday make sure you check the limit on your policy and tell your insurer if you’ll be away for longer.
“Unoccupied homes are at greater risk of damage from burst pipes, the average cost of repair is over £10,000 but we have also seen damage costing more than £250,000.”
Starting a business from home
Starting a business from home could impact your insurance policy, so it’s important to check with your insurer before setting up shop.
What’s covered will vary between providers, but your insurance is more likely to be impacted if you have customers visiting your home, or if it involves storing stock or hazardous materials.
At Admiral, customers do not need to inform the insurance company if their new business is clerical and doesn’t involve any customers visiting the property.
Across the board, you usually don’t need to inform your insurance company if you’re simply working from home for an employer.
“Some insurers wouldn’t need to know if you’re an accountant running your own business from home, for example,” Dave says.
“But if you were having clients come to the property that could change things.
"In general, it’s best to double check with your insurer before any business use to make sure you’re covered.”
Dave says not declaring building work is the most common reason for people getting caught out.
He says it is essential to update insurers as soon as possible if you are planning structural works, like an extension.
Routine maintenance and decoration aren’t usually an issue, but not keeping insurers up to date on anything structural could result in your policy being declared void.
It’s important this is flagged before the work starts.
“Usually with a renovation people are extending the property,” Dave explains.
“So not only would the rebuild cost be higher, but you’ll also probably have more contents in time.
So it’s important insurers are aware, so your policy can be kept up to date.”
Getting a lodger
It’s essential you let insurers know if you are taking in a lodger as this will often impact your insurance premium.
Dave says this is something that needs to be done as soon as it happens, even if your insurance is not due for renewal.
“This is because not only will you have an extra person living in the property, which creates more risk, a lodger is usually someone you don’t know – so there’s a bit less control in terms of theft or damage,” Dave explains.
At Admiral this doesn’t apply to people who have taken in refugees.
Dave says: “Like most insurers, Admiral is supporting customers providing a home to refugees.
"They don’t need to tell us if they are taking in a refugee as a lodger and therefore it will not invalidate their insurance.”
Installing a pet flap
Anything that might impact the safety and security of your home could also impact your insurance, David warns.
This includes installing pet flaps – particularly any that are big enough for a person to climb through.
“Not only would you be putting yourself at risk of burglary, but from an insurance point of view nearly all insurers would have a clause in their contract that states customers must take steps to avoid a loss or claim,” David explains.
“So you need to ask yourself ‘Is what I’m doing increasing the chance of a claim?’, if it is then there’s a chance it could impact your insurance.”
David says Admiral does not ask explicitly about pet flaps when customers take out insurance, but says this varies across the industry.
He advises anyone who is thinking of installing a pet flap to call their insurer to check whether it will impact their insurance before going ahead.
Buying something expensive
Be sure to update your insurer if you buy any high-value items, which you want covered by your policy.
Personal possessions cover typically insures items worth up to £1,000 or £2,000, but anything worth more than that will need to be listed separately.
“If you’re buying a very expensive piece of jewellery for example, it’s really important you let your insurer know as otherwise it may only be partially covered – or not covered at all,” Dave warns.
He adds it is important to keep on top of the contents value of your home in general, especially as we are going through a period of high inflation.
“Keeping those values up to date ensures you are covered,” he says.
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Having a baby
Even having a baby could impact your insurance, as this means an extra person living in the property.
It’s a good idea to update your insurers to let them know there’s an extra little person in the house to avoid being caught out.
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