Friday, March 1, 2013

Events You Should Notify Your Insurer About

Insurance covers every aspect of life, from homeowner’s insurance to life, car, property, health, business and everything else. When events occur in life that can affect insurance premiums, it can be tempting to avoid communicating these to the insurance company because of the additional financial burden that the higher premiums cause. But all insurance policies contain the requirement of informing the insurer of any events or occurrences that could affect the cost and terms of the coverage. Not to do so may render the policy void.

Here are some of the common events that are either concealed from insurance companies or which are overlooked as not being relevant to the coverage:

In many cases, an insurance claim may be filed and the company will know about the event. But in some instances no claim may be raised and then it is incumbent upon you to inform the insurer.

In the case of homeowners insurance, events such as remodeling or major renovation or room additions change the value of your home. The insurance company should be informed about this and the policy modified to reflect the increased value so that if a claim should be raised, the policy provides adequate coverage.

In the case of business insurance, things like a need to increase stock or inventory levels or an increase in turnover must be reported to the insurance company so that your coverage can be modified to reflect the possibility of higher loss due to accident, theft or disruption of commercial activities.

Similarly, events like hiring new people should be conveyed to the insurer so that the health insurance and workmen’s compensation policies can be revised as needed.

Car insurance is an area where many events that can affect insurance occur. An accident that causes damage or injury may be covered by the other party’s insurance but you should inform you insurance company also, as the value of the car may be changed and the injuries could have long term health consequences.

Not all events result in increased insurance premiums. Many, such as installing a security system at the home or place of work, increased fire protection, putting anti-theft devices in your car or stopping smoking or excessive alcohol consumption can reduce what the insurer sees as risk factors and result in lower insurance costs.

The basic principle to follow is inform the insurance company about any events that could affect the policy either in terms of leaving you without inadequate coverage or affecting the coverage that exists. And if you are not sure about whether the insurer should be informed about a particular event, the policy should be “when in doubt – inform.”

An insurance company that sees that you are diligent about informing them about events that could affect your insurance coverage, even if they do not, will go out of its way to work with you when you do make a claim.

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