What Does Negligence Refer To With Home Insurance?

In the world of home insurance, you might hear the word "negligence" come up from time to time. This word is important with home insurance, and agents and adjusters often use it when referring to the reason for a claim. If you own a home and have home insurance, it is important to understand what this means and how it can affect you.

What it means

When you hear this term in reference to home insurance, it refers to a homeowner's failure to act responsibly in some way. A person who is negligent is one who failed to do something important, and the result of this could be something that is not good. Negligence matters to insurance companies because it is one of many reasons why homeowners file claims on their home insurance policies.

Examples

Negligence can lead to a homeowner's claim in many different ways. For example, a person who smokes that fails to extinguish a cigarette before placing it in an indoor garbage can would be considered negligent for starting a fire. If a homeowner has a leaky pipe that they know about and fail to fix, the homeowner would be negligent if major water damage occurred in their home.  

The effects it may have on a claim

When a homeowner is negligent and ends up with a claim on their policy, several different things could happen. If the peril that led to the claim is a covered peril, the insurance company is likely to honor the policy and pay the claim, even if negligence was the root cause of the problem. There is also a chance that the insurance company would deny the claim if the cause was negligence, and this might occur if the homeowner clearly did not take the right steps and precautions to avoid a major problem. How an insurance company handles a negligence claim will depend on many things, including the insurance company's policies and the nature of the claim.

The long-term effects it may have

When a person has a negligent claim, the insurance company could choose to not renew the person's policy when it comes up for renewal. This commonly happens, but it is not always the end result.

Understanding how insurance works and how companies handle negligence in claims is important just so that you can take the necessary steps to protect yourself and your insurance policy. If you have questions, talk to a property insurance provider today.