Do you wonder if your home insurance company will cancel coverage or deny a claim if you’ve told them a small fib about the property? The answer is that it is completely within their rights to do so. Furthermore, if you file a large claim is large — a situation where you really need the money — the probability increases that little white lies will come back to bite you in the backside.
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How do dogs, trampolines and tree houses impact your homeowners insurance?
This post, “Dogs, Trampolines and Tree Houses” looks at items that can cause you problems. This is important to know because the consequences of hiding information from your insurance company can be severe. The following are five common ways people mislead their insurance company when buying homeowners insurance. These five items could cost them dearly later:
Minimizing home value
In the case of a total loss, your best case scenario is you get money for the reduced value of insurance coverage you purchased. This best case scenario does not give you enough money to repair or rebuild the home. Your worst case scenario is that the insurance company finds out about your fib and refuses to pay the claim. If you have a mortgage, the mortgage holder could then take legal action against you for the money they lost and you do not have a place to live.
Most people that minimize their home value are likely looking to save money. Instead, start by finding out what a fair price is where you live. Just click the button below to use our homeowners insurance calculator.
Remodeling or improving the house and not reporting it to the insurance company
To ensure coverage for improvements you make, report them to the insurance company. Make sure all work is according to building codes and inspected by the local building department. In situations where you add new heating types, like pellet or wood burning stoves, make sure you get it in writing from the insurance company that these items are covered by your insurance policy. You need to make sure they can’t exclude portions of the home from the coverage, or worse yet, cancel your coverage as a result of the improvements you made.
Dogs, trampolines and tree houses
Some insurance companies refuse to insure people who own dogs with a history of aggressive behavior. Injuries while using trampolines are often excluded in home insurance policies. If your policy has this exclusion, your insurance company has the right to cancel your coverage. Treehouse exclusions are less common, but check with your insurance company.
Deceiving on insurance claims
First, it’s important to understand, insurance claims are not free. Once you make a claim you are considered higher risk and your insurance rates will go up. Deceiving the insurance company in a claim is not worth the risk. Insurance companies are aggressive about detecting and prosecuting fraud. The result for you could be steep fines and jail time.
Not being honest on the application
Insurance companies have access to computer databases with information on credit scores, mortgage amounts, home sales price, your claims history, etc. This makes it easy for them to check the accuracy of your application, and embarrassing for you if you fibbed. Worse than simply being embarrassed, you may get rejected for insurance.
Taking these simple precautions will prevent you from worrying about whether something you have done will cause the denial of your claim following damage to your home or an accident. Not worrying will give you more time to enjoy the dogs, trampolines and tree houses.
Is your home your most valuable asset?
For many families, their home is their most valuable asset. Get a free ValChoice rating to find out if your your home is well protected. It’s too important not to. Click the button below to get a free rating on any homeowners insurance company.
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