Your insurance policy is based on information about you, your vehicle, your home and how they are being used. But life doesn't stand still.

You may renovate your home, start renting out part of it, buy a wood stove, let a newly licensed family member drive your vehicle, start using your car for work, or make modifications to your vehicle.

Some changes may seem minor to you but can be important to your insurance company. In insurance terms, an important change that affects the risk may be considered a material change in risk.

What is a material change in risk?

Generally, a material change is a change in circumstances that could affect an insurance company's decision to insure a risk, the premium it charges, or the terms and conditions under which it is prepared to provide coverage.

The important thing to remember is that you don't need to decide whether a change is material before contacting us.

If something has changed and you're not sure whether your insurance company needs to know, tell us. We can determine whether the information needs to be reported to your insurer and whether any changes to your coverage are required.

A recent Ontario court case highlights the importance

A recent Ontario court decision provides a significant example of what can happen when an insurer isn't told about a change.

In Aviva Insurance Company of Canada v. Cahill, the insured made substantial performance modifications to a Chevrolet Corvette after the policy had renewed. The modifications reportedly included a supercharger, methanol injection system, high-flow catalytic converters and street-legal drag racing tires.

The modifications were not reported to the insurer or broker.

Following a serious collision, a dispute arose over insurance coverage. Aviva demonstrated that its underwriting rules would not have permitted it to insure the vehicle had it known about the performance modifications.

The Ontario Superior Court found that the insured had an obligation to disclose the material change and that the insurer was not required to specifically ask about vehicle modifications again at renewal.

While the circumstances of this case were unusual, it is an important reminder of a much broader principle: when something changes that could affect your insurance risk, let your broker know.

What kinds of changes should you tell us about?

There are many situations where you should contact us. Here are some common examples.

Automobile insurance

Let us know if:

• A new driver in your household becomes licensed or starts driving your vehicle.
• The principal driver of a vehicle changes.
• You move or the location where the vehicle is normally kept changes.
• Your use of the vehicle changes, including increased commuting or business use.
• You begin using the vehicle for deliveries, ridesharing or another commercial purpose.
• You make significant modifications or alterations to the vehicle.
• You purchase, sell or replace a vehicle.
• There is a significant change in how or where a vehicle is being used.

Home and property insurance

Contact us if:

• You move out of your home or it becomes vacant or unoccupied.
• You begin renting out all or part of your home.
• You start operating a business from your home.
• You undertake a significant renovation or addition.
• You change the occupancy or use of the property.
• You install or change a wood stove or other heating system.
• You make significant changes to electrical, plumbing or heating systems.
• You add a swimming pool, hot tub or other significant feature.
• You purchase expensive jewellery, artwork, collectibles or other high-value property.
• Ownership of the property changes.
• You begin using the property for short-term rentals.

These are examples only. There are many other changes that could be relevant depending on your policy and insurer.

Why does reporting a change matter?

Insurance companies determine whether they are prepared to insure a risk based on the information available to them.

When circumstances change, the insurer may simply update its records. In other situations, there may be an additional premium, a change in coverage, an endorsement that needs to be added, or additional information the insurer requires.

Occasionally, a change may mean that the existing insurance company is no longer able to insure the risk. In that situation, knowing about the change gives us an opportunity to look at other insurance options.

The worst time to discover that an insurer should have been told about a change is after a claim has occurred.

An undisclosed material change can potentially result in serious coverage consequences, depending on the circumstances and the terms of the policy.

Don't wait until your renewal

A common misconception is that changes can simply be discussed when the policy comes up for renewal.

Some changes need to be reported when they occur.

Your renewal is a good opportunity to review your insurance and make sure the information on your policy remains accurate, but you should not necessarily wait until renewal to tell us about an important change.

Not sure? Ask us.

We don't expect our clients to be insurance underwriters.

If something has changed with your home, vehicle, family circumstances or how insured property is being used, and you're wondering whether it matters to your insurance, contact us before making assumptions about your coverage.

We would much rather have a conversation and determine that no change is required than find out about an important change after a loss.

When in doubt, let us know.

This article provides general insurance information only. Coverage, eligibility and reporting requirements vary by insurer, policy wording and individual circumstances. Please contact our office to discuss changes that may affect your specific insurance policy.