Being a good homeowner extends far beyond keeping up with your mortgage payments and maintaining a clean lawn – it stretches into the home’s skeleton and internal organs that keep it healthy and strong.
There’s a certain pride of ownership that comes with keeping your home in good shape, and a level of responsibility as a homeowner to keep your home up to code because your insurance policy won’t cover everything under the sun.
Your insurance company has a right to know that your home is in good health, and you have to be prepared to give new information every 5 years to prove that this is in fact true. If you aren’t reinvesting into your home and letting it deteriorate – then your insurance company could decide to part ways with you.
Whether you are a first-time homebuyer or have owned your home for over half a century, here are the top areas that you need to remain proactive with.
What are the 4 areas you need to stay on top of?
Every 5 years, your insurance company will run an audit and will come looking for updates to make sure the home is being kept up to code. A lot of new homeowners waive the right to an inspection – and it can have a devastating impact. Neglecting any problem that puts you in danger or could get worse over time can turn a relatively small problem into a much larger and costlier one. You have to be prepared to invest back into your home.
Bear in mind that things in your home have a lifespan, and this means being diligent and maintaining certain areas of the home. We’ve compiled a list of the top four areas that are on your insurance providers’ radar.
- Electrical
The older your house is, the greater the chances that the wiring might be out-dated or unsafe. If your house is more than 40 years old, you will likely have to upgrade the electrical wiring because the existing wiring may no longer be up to code. And aluminium wiring has a potential to overheat and cause fires – which is a red flag for many insurers.
So if your insurance provider decides to audit your home and calls you out of the blue to find out about your electrical updates, this is one of the areas that is non-negotiable.
- Furnace
The average life expectancy of your furnace is between 16-20 years old. The U.S Department of Energy suggests replacing it absolutely no later than the 20-year mark when the energy efficiency will start to drop off. A good rule of thumb is to take a proactive approach and get it replaced by the three-quarters mark.
- Heating
If you’re buying a home with an oil tank, or heating it with natural gas, it’s wise to check with your insurance company first because they typically prefer electric heat or forced-air gas furnaces. While natural gas may burn cleaner than oil, it does bring with it its own environmental issues and is more prone to causing fires. Something to think about.
- Plumbing
There are certain things you can’t have coverage for within your home. For instance, if an older home has structural problems, you can’t buy insurance to cover for wear and tear or deterioration. However, if there is water damage in your home, your insurance company will cover the water damage. With water damage claims consistently rising over the past few years, it’s an important area to stay on top of – and also know specifically what type of coverage you have in case of an emergency.
What are the Consequences of Non-Compliance?
If your insurance company asks you to do something, and you neglect to do it, in all likelihood you could be cancelled and they will not renew you as a client. In this event, it will become extremely difficult, if not impossible for a broker to get you another insurance policy – essentially making you uninsurable. Some insurers will require an inspection, or classify you as high-risk and potentially not insure you at all.
This could lead to further problems where your mortgage holder could call in the loan, or you might have to find insurance through the bank, which could haunt you in the long run. There can be terrible financial consequences if the insurance company finds out that you have misrepresented or have not kept things up to date.
How a broker can establish a proactive relationship with your provider
If there is a willingness on the clients’ behalf to do all the right things to keep their home in top shape, and a conscious effort being shown that they are staying on top of their home maintenance, then a broker can help to smooth the process and strengthen the relationship with the provider.
For example, an insurance provider understands that a handrail cannot be replaced in the middle of January – but if you are willing to make that change, then a broker can communicate that information with the insurance company to provide a viable timeline to have it done and show that their client is a good homeowner. And more often than not, a lot of clients will be compliant because they want to make sure that their insurance company will pay for claims.
Our brokers at Insurance Portfolio Inc. can help answer your questions and provide you with a no-obligation quote to help make sure you’re a great homeowner. Get started today!
