The devil is always in the detail! Home insurance small print that policyholders should be aware of to avoid refused claims
I was with two solicitors and as you do got talking about their jobs. During the conversation I asked them both what the worst case they had worked on.
The first solicitor specialised in criminal cases so you imagine the types of cases he worked on. The other however worked on civil cases and by chance it was an insurance case.
The case revolved around a clause that’s in all insurance policies and results left a trail of devastation for the family involved. The family involved had planned a holiday and whilst they were away their son had leave from work so he agreed to house-sit for them whilst they were away.
One night the son decided to have some chips so dug the chip-pan out of the back of the cupboard. The decision to have a midnight snack resulted in a full-blown house fire with damage estimated in excess of £100,000.
As you can imagine the son was devastated at what had happened. His parents were obviously upset, but it was only bricks and mortar which can be replaced unlike a son. The house was made safe and secure and the insurer was informed and everything I suppose was put on hold until his parents returned.
At first their insurer was helpful and sympathised with their situation until out of nowhere a bombshell was dropped on the family. The son had failed to disclose whilst in the army he got into a little trouble with the military which meant he was sanctioned.
This meant he had the equivalent of a criminal record and had failed to disclose this to his parents, who obviously failed to inform their insurers. Not many people will realize this but insurers put a clause into policies which mean policyholders are liable to inform insurers if they have anyone staying with them that has a criminal records.
This could be argued could be for underwriting reasons as a ‘criminal’ is more likely to be higher risk and therefore if informed an insurer may refuse cover. This nondisclosure cost the family their home.
I believe the family is now living in rented accommodation, continuing to pay a mortgage and unable to afford the costs required to repair their home. Still boarded up, water and fire damaged it is highly unlikely they will ever be able to afford the repairs needed to make the house habitable.
So, before you offer a friend a bed for the night or get a friend to house-sit, you may want to take a minute to ask if they have any criminal records which could invalidate your insurance.
I know when the policy documents arrive nobody reads them, but take the time because if you miss something important and you claim you could end up losing the biggest asset you will ever own.