Insurance is generally purchased by risk-aware people / businesses as a guarantee of compensation for a specified loss, damage or illness.
Being unfamiliar with the terms and conditions of your insurance policy is more likely to trip you up than a loophole in the policy itself. Often people only properly read and understand the T&Cs when it’s too late – when their claim has been rejected.
- Vehicle not parked securely at night. If you state that your car is parked securely – in a garage or off the street – at night, and, in the event of theft, it is found it was regularly in the street, your claim could be rejected.
- Drunk/ reckless driving.
- If a security device (e.g. an alarm) or a tracking device is not installed and your cover is conditional on your car being fitted with either of these devices, your claim will most likely be rejected.
- Vehicle used for business – if you plan to use your vehicle for business, you need to disclose this to your insurer.
- When it comes to Buildings insurance, the insured value is not what you could get if you sold your property; it is for the cost of replacing or rebuilding your home at today’s values. Make sure your home is not undervalued as this is the most an insurer will pay out.
- If the loss or damage was the result of “gradual deterioration” and lack of “maintenance”, you will not be covered.
- Poor design and faulty workmanship.
- Unoccupied premises – if you leave your home unoccupied for 30 consecutive days or more without advising your insurer, they could have grounds to repudiate a claim.
- Material change in the risk – insurers must be informed of any “material increase” in the value of the risk they are covering. For instance, with home prices and building costs escalating so quickly, the replacement value of homes has increased. Any alterations to your property will likely increase the value and there could be risk of damage during construction.
- Non-compliance with security requirements – make sure you are familiar with policy conditions and endorsements. Should you fail to comply with your policy conditions on minimum security, your claim could be repudiated.
- You must have what’s known as an “insurable interest” in the property, in other words a financial interest in insuring the asset.