When should you contact your insurance agent/broker or insurance company? Of course, you need to contact them to file a claim or when an event may lead to a claim. There are also many times that you might not think to contact your insurance partner, but you should.
For instance, it’s easy to assume that, when you pay off or refinance your mortgage, the lender or title company will notify your insurer. Doesn’t all of your information automatically “flow through” to everyone who needs to know?
Often it should, and often it does. But if some overworked administrative assistant six states away neglects to forward your information, the onus and liability doesn’t land on him or her. It lands on you.
Remember, you’re ultimately the one responsible for keeping your insurer in the loop and up-to-date.
You don’t have to send your insurance company a birthday card. But there are 10 occasions you might not think of where it’s critical to keep your insurance partner informed.
Financial and legal changes
Sale of your mortgage
Typically, you’ll receive a letter from your bank/lender that your mortgage has been sold to another lender. The old and new lender should inform your insurance company, but this sometimes gets lost in the shuffle. If your insurance company isn’t informed, you might receive a threatening-sounding letter from the new mortgage holder that it intends to purchase expensive insurance (that you’ll pay for) to protect its investment. This force-placed, or bank-placed, insurance is designed to protect the lender, not you.
While your insurance company typically provides proof of coverage at this time, things sometimes slip through the cracks.
This is especially critical if your insurance is paid out of escrow, which is generally the case, rather than billed directly to you. You don’t want your insurance to lapse because you didn’t pay a bill you never received (because no one knew to send it to you).
Other mortgage and/or deed changes
If someone on the deed or mortgage changes his/her name because of marriage, divorce or some other reason, notify the insurance company. Transferring ownership of the property to a trust also warrants a call.
Major life changes, such as the death of a spouse or the addition of a child or dog, also warrant a call to your insurance partner. Other examples: Parents die and leave a home to their children (or other heirs), or a second cousin moves in and starts paying rent.
Changes and activities in your home
Renovations or expansions
Anything that changes the value of your home or the cost to repair or rebuild it is important information for your insurer. If you make major changes without updating your policy and then have some or all of your home damaged, you may not be fully covered. And you definitely want to inform your insurer if you add a pool.
Starting a home-based business
Whether you’re going full-time or launching a side hustle, even if no clients will ever visit your home, your insurance partner needs to know. At the very least, you want to make sure that your business equipment and records are protected. Some homeowners’ policies may have limited built-in coverage for home-based businesses, but double-check.
Hosting a big event
You don’t have to tell your insurer every time you have people over. But if you’re planning a big event—such as a political fundraiser, an in-home concert, or even a large family reunion or wedding—your insurance partner should be notified before the event.
If you’re a snowbird who spends the winter in Florida or you’re planning a long trip, talk to your insurance partner. Many policies will only cover an unoccupied building for a limited time.
You don’t have to report minor injuries, but any injury serious enough to require medical care is something you should communicate. Homeowners’ policies generally include coverage specifically for these types of occurrences.
These changes won’t necessarily affect your premium (although they could). And in some cases, your insurance company will allow a reasonable grace period. If your spouse dies, you don’t have to inform your insurance company the day of the funeral.
To avoid issues with potential claims or liability, contact your insurance partner in a timely manner if any of the above events occur. Please note that this list is by no means exhaustive. When in doubt, let your insurance company know.
If you have any questions about when to contact your insurance company or broker and how that can affect your homeowners insurance, or would like a free insurance review, please call us at 877-576-5200.