It is disenchanting when you find out, contrary to your expectations, that a loss is not covered because of a policy exclusion. Policies contain many exclusions as a means of defining coverage intent.
But what may be even more disturbing is having your coverage denied because of a breach of a policy warranty; one that was never explained to you. Your policy may contain a warranty which outlines conditions precedent. What this means simply is you must meet certain obligations while the policy is in force in order to maintain coverage. A breach of a policy warranty could void your coverage ab initio (from the beginning) for a loss arising from this breach.
Two of the more common warranties found in property policies relate to theft, namely Burglary Alarm Warranty and Locked Vehicle Warranty. Theft is a typical covered peril. However, with the inclusion of these warranties, you must maintain prudent loss control measures to protect your property from theft in order to obtain coverage benefits . Let's look a little closer?
The Burglar Alarm Warranty requires that you must maintain a fully connected , operational and certified alarm system during off-hours. If the system fails to meet all these conditions and there is a break-in, the policy warranty has been breached. There is no theft coverage.
The Locked Vehicle Warranty requires that insured property left in an unattended vehicle must be locked. If the vehicle is not locked and there are no visible signs of forced entry, there will be no theft coverage. Because of the frequency of premises and vehicle break-ins, it is necessary to implement loss prevention measures. And when they have been compromised, the policy is there to protect you. Understanding your policy warranties is just one way you can ensure your policy will perform as expected, with no surprises.
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