From failing to clear the gutters to taking a long holiday, we reveal the things that could backfire if you have to make a claim
Having your property damaged in a fire, flood or storm – or discovering you have been burgled – is distressing. But as long as you have buildings and contents insurance, you should be able to claim back any costs, minus your excess charge.
However, not every claim is accepted and there are things you may or may not be doing, even unwittingly, that could invalidate your cover. Here, we take a closer look at common reasons why insurers might reject your claim.
1. Not keeping your home in good repair
You may think the state of your home is none of your insurer’s business. However, it could be used as a reason for rejecting an insurance claim.
For example, an insurer could reject a claim for water damage caused over a period of time by a blocked or leaking gutter as the damage could have been prevented if you had maintained the gutter.
Insurance also doesn’t cover you for normal wear and tear to your home. It is there to help when the unexpected happens.
Sarah Cordey, senior campaigns officer at the Association of British Insurers, says: “Insurance is not a maintenance contract. You have a responsibility to look after your property.”
2. Renovating your home
If you are having work carried out on your property – such as converting a loft into a bedroom – there is so much to think about that contacting your insurer could be the last thing on your mind. However, not doing so could leave you unprotected.
Ben Wilson, home insurance expert at GoCompare, says: “Your policy document will have terms and conditions which include the requirement to notify your insurer of building work being carried out.”
Insurers may view building work as an increased risk – both during the work and once it is completed.
Ian Crowder, home insurance expert at the AA, says: “You might have ladders and scaffolding around your home, which could make it easier for a thief to gain entry. Equally, once the work is done you might end up with more bedrooms, which will also affect your cover.”
Your premium may rise for the duration of the works, depending on the extent of the changes. It could also increase permanently on completion.
3. Carrying out DIY work
If you plan to try your hand at DIY, check your home insurance before opening your tool box.
Most policies won’t cover you as standard for accidental damage – so if you drill through a water pipe, you could find yourself out of pocket.
Ms Cordey says: “You can’t claim for a problem caused by a DIY mishap if you didn’t pay for accidental damage cover in the first place.”
Some insurers will offer accidental damage as an optional extra, so look into paying for this cover before you start your DIY project.
4. Going on a long holiday
Most home insurance policies will include a condition that you can’t be away from your property for long periods of time, usually between 30 and 60 days.
Shaune Worrall, technical services manager at the British Insurance Brokers’ Association (BIBA), says: “Unoccupied properties may be treated cautiously by insurers as they may attract malicious damage or theft – and even arson. In cold periods, pipes can freeze and burst.”
The key is to read your insurer’s Ts&Cs, as some insurers will allow you to be leave your home unoccupied for longer periods – provided you tell them. Some may with certain conditions, such as keeping the heating maintained at 15˚C, ensuring alarms are activated and the property is inspected every week.
5. Underestimating the value of your possessions
Being underinsured – either inadvertently or deliberately in a bid to save money – could cause major issues if your home gets damaged in a disaster such as a fire or flood.
Your insurer may penalise you with a discounted settlement on the grounds you were not covered for the correct value of goods or void your policy entirely.
Mr Crowder says: “In the event of a significant claim, the payout will be discounted by the estimated level of underinsurance. So if your house went up in flames and your contents were actually worth twice the value of cover, you will be paid only half the claim.”
6. Failing to itemise valuables
You need to be aware that as well as an overall limit, most home insurance policies will have a single item limit, usually up to around £1,500.
Mr Wilson says: “If an item is valued higher than this, you will need to arrange for it to be specifically included on the policy.”
This might include valuables, such as engagement rings, cufflinks and expensive gadgets. Remember to keep receipts or valuations to prove ownership in the event of a claim.
If items are not specified, you might not receive a payout if they are stolen or damaged – or certainly not for the full value.
7. Renting out a room
If you have someone living in your home paying rent to live with you, you need to tell your insurance company.
Sarika Thanki, spokesperson for Halifax Insurance, says: “Before letting out a room to a lodger, you should let your insurer know in order to make sure you are properly covered. Your insurer will view the property as being more vulnerable to accidental damage and theft.
If you fail to tell your insurer and your home gets damaged, you may find your claim is rejected – or insurance policy cancelled altogether.
8. Running a business from home
While there is no issue with working from home occasionally, if you’re running a business from home you need to talk to your insurer.
Clients coming and going, and stock stored on the premises, could mean an increased risk of theft.
Simon Henrick, head of news at insurer Direct Line, says: “Office equipment may well be covered within a standard policy, but employees, business stock and larger machinery will not.”
Scour the terms and conditions to see whether more specialist cover is needed.
9. Fitting an alarm but not using it
If you’ve told your insurer that your home is fitted with an alarm, you must use it. If not and your home gets burgled, your insurer may reduce the payout or refuse to pay out at all. The same applies to window locks.
If not, it could be seen as ‘contributory negligence’ and your insurance could be deemed invalid.
10. Failing to report a crime quickly
If you need to claim on your home insurance it is vital you follow the procedure detailed in your policy documents. Thefts must be reported to the police within 24 hours in order to obtain a crime number. You will need this number to pass on to your insurer, so it can proceed with the claim.
Will an insurer pay out if you make an honest mistake?
Insurers are subject to new laws that set out four categories of non-disclosure: deliberate, reckless, innocent and inadvertent.
• Deliberate non-disclosure is where you provide information you know to be untrue or incomplete.
• Reckless non-disclosure is where you mislead the insurer by recklessly giving answers without caring whether those answers are true or false. In these scenarios, the insurer may avoid the contract, refuse all claims, and not return any of the premium paid.
• Innocent non-disclosure is when a customer acts in good faith, but falls into this category perhaps because the insurer’s question is unclear or ambiguous, or because the relevant information is not something they should reasonably know. In this scenario, an insurer will not be able to ‘avoid’ the contract and should pay claims.
• Inadvertent non-disclosure is when a customer acts in good faith and unintentionally misleads the insurer. This can occur just by failing to read and check the questions and answers thoroughly enough. Here, insurers may re-write the insurance on the terms they would originally have offered it they had been aware of all the information. In some cases, this may result in a smaller payout or no payment at all.
If non-disclosure occurs, you should demonstrate it was unintentional. The British Insurance Brokers’ Association comes up with the following example: If a person forgot to list a high-value item to a new insurer and then came to make a claim, but could show from their previous insurer’s policy schedule that the item was insured – and that the value isn’t significantly different – it would be reasonable to think that the non-disclosure was unintentional.
Can insurers reject your claim if you fail to declare an unrelated issue?
While insurers should not be looking for ways to decline a claim, you need to consider the whole picture.
For example, if your home is in a poor state of repair, this could increase the chance of you getting burgled – and this could be an issue if you try to make a claim.
Insurers cannot reject your claim for things that are totally unconnected. That said, you need to tread carefully if, for example, during a claim for subsidence, the insurers found out you had lied about having a burglar alarm – which may have given you a lower premium.
Insurers may reject the claim on the basis of giving false information, even if having a burglar alarm makes no difference to a claim for subsidence.
Five tips on buying and claiming insurance
• Buy the right policy. Check the excesses, cover limits and exclusions. Don’t just buy on price.
• Always read the small print including the key facts and exclusions.
• Don’t try to withhold information as it may lead to claims being rejected and your cover being invalidated.
• If you have any specialist requirements, speak to a broker. Visit the British the BIBA (Biba.org.uk) to find a broker.
• Don’t exaggerate the value of your claim or tell fibs. If your insurer finds you have been dishonest with any part of a claim, it is entitled to decline the whole claim – and you may have difficulty getting insurance in the future.
ESTHER SHAW is a freelance personal finance journalist who writes for publications including the Sunday Express and Sunday Times