10 Things That Can Cause Your Insurer to Drop You

By Catherine Powell

Image courtesy Pixabay

Nobody likes to make costly mistakes that can hit them in the wallet.  Whether it's trusting your unruly teenager with the keys to the family sedan or heeding a stock tip from your hair stylist, if you take risks with your assets you run the risk of taking a financial hit.  However, what can even prove worse is making an innocent mistake that can cause your insurance company to drop your coverage.  To make sure this never happens to you, I've come up with my top-10 list of reasons that could cause you to lose coverage.

#1: Turning your residence into a bed & breakfast. - While you may wish to rent out all or part of your home for monetary gain, doing so without first consulting your insurance agent is one sure way to lose your homeowner's coverage.  Whether you're planning on doing this on your own or are planning on availing yourself of an online portal such as Airbnb doesn't matter if your existing policy has an exclusion for tenants.  If you don't realize this and a renter should damage or destroy your home, you'll quickly find out when your insurance carrier denies your claim before dropping your coverage.

#2: Running a business in your home. - If you set up a commercial enterprise in your home that entails seeing clients, storing merchandise, and/or operating business-related equipment, you could find yourself out of business in a hurry.  That's because homeowner's policies don't cover liability or property issues arising from anything other than domestic issues.  Should a client slip and fall on your property or should your inventory and business equipment go up in flames, not only will your insurer deny your claim, they will undoubtedly drop your coverage.  That's the bad news.  The good news is that all you have to do to be in compliance and fully covered is to add a rider or obtain a business owner's policy that will protect you, your business, and your home without breaking the bank.

#3: Thinking of taking a long vacation? - If you leave your home vacant for more than 30-days, failing to have your property looked after for an extended time could cause your insurance to be dropped.  That means if your property were to be burglarized, damaged or destroyed during an extended absence, not only could your insurance carrier deny your claim, they can drop your coverage outright.  To avoid this dilemma, make sure you read your policy to determine what your insurer requires you to do if you plan on being away from home for a long time.

#4: Keeping up with the Joneses. - Have an urge to splurge on a swimming pool, a new garage or a room addition?  Then you'd better inform your insurer prior to breaking ground.  Otherwise your homeowner's insurance is subject to cancellation.  Why? Anything you do that makes a substantial change to the value of your property needs to be communicated to the company that insures it.  Failure to do so in a timely manner may cause your coverage to be discontinued.

#5: Not keeping up with your home's maintenance. - Just as making a major renovation to your property can get you in Dutch with your insurance company, so too can neglecting the care and maintenance of your property.  Fail to maintain your home's gutters, roof, trees or shrubs can create serious problems for you should you ever need to file a claim.  Even such things as a chimney that hasn't been cleaned in years, leaky pipes or a water heater that's in disrepair can come to haunt you the minute they cause property damage.  It doesn't matter whether your property was damaged or destroyed by water or fire if your insurer can prove that you knew there was a problem and failed to correct it.  Case closed, claim denied, policy dropped.  If you don't want to wind up shouldering the burden of paying for property damage that would normally be covered under your existing homeowner's policy, a little spring cleaning can do wonders to ensure your home and property are fully insured before storm season arrives.

#6: Is anyone under your roof breaking bad? - If you, a tenant or anyone in your family is operating a criminal enterprise on your property, it's a certainty that your insurance coverage will be dropped as soon as your insurer gets wind of it. It goes without saying that any claim arising from property damage or liability issues at a home where criminal activity is discovered will be denied.  

#7: Have you submitted too many claims. - Even though you pay your premiums on time and are 100% in compliance with your policy, it's likely that an insurer will drop your coverage if you submit more than one claim during a policy term or more than three claims in five years.  Since the average number of claims per insured individual is one every 9-10 years, filing too often can cause an insurance agency to drop you like a hot potato.  While this doesn't mean you shouldn't file a damage claim, it should give you pause to consider whether filing another claim is going to cause your rates to rise or your coverage to be cancelled.

#8: Love me, love my pet. - While being a pet owner isn't a bad thing, the kind of pet you own could cause your insurer to drop your coverage. That means if you or anyone in your family owns a dangerous animal, you could be dropped by your insurance carrier.  Certain breeds of dog are also prohibited by many insurance companies.  These include pit bulls, Doberman Pinschers, German shepherds, rottweilers, Chows, and wolf/dog hybrids, among others.  Before you or yours decide to bring a new pet into your household, it would behoove you to touch base with your agent to determine whether it's likely to affect your coverage.

#9: Do you have a side gig to make ends meet? - If it involves the use of your vehicle, you need to talk to your insurance agent to make sure it doesn't interfere with your auto coverage.  Using your vehicle as a taxi or a delivery vehicle could invalidate your coverage.  Get into an accident and you could wind up having to cover everything from property damage to liability and medical expenses for anyone injured in the wreck.  

#10: Can bad behavior cause your auto coverage to be dropped? - Anything from a DUI conviction, to losing your driving privileges, to too many traffic tickets can cause an insurance carrier to drop your auto coverage.  With that in mind you should consider slowing down to the speed limit or taking a taxi home the next time you decide to have a few drinks with the boys at the bar.  As Ben Franklin used to say, "An ounce of prevention is worth a pound of cure."

Catherine Powell is the owner of A Plus All Florida Insurance in Orange Park, Florida. To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com