Many people take a set it and forget it approach to their homeowners insurance, but you could be setting yourself up for a big problem in the future if you don't check your policy periodically to ensure you have enough coverage. Here are two times when you should review your homeowners insurance and get a new quote if necessary.
1. You Make Valuable Changes to Your Home
It's normal for people to renovate their homes to make them more comfortable to live in. Any and every time you remodel your house, however, you should check your policy to make sure you have enough insurance coverage.
To grasp why this is important, it's essential to understand that your policy is designed to cover the replacement value of the home (i.e. how much it would cost to completely rebuild the house from the ground up). This amount is typically different from the home's market value because the market value encompasses other things such as cost of the land and the sales price of other homes in the area.
Being underinsured on the rebuild cost means you won't get enough money to recreate the home as it was before the disaster. You'll either have to settle for less or pay the difference out of your pocket. Thus, whenever you do significant renovations on the house, have it appraised by an expert and update your homeowner's policy accordingly.
2. You Get a Dog
Dogs make great companions, but they can also mean trouble for your homeowner's insurance policy. According to some statistics, dogs bite around 4.7 million people every year. And even though a large portion of those injuries (about 81%) don't require medical attention, the injured parties can sue for damages related to the incidents.
If your dog hurts someone on your property and the person files a lawsuit against you, your homeowners insurance company is the one that has to write a check to the victim if they win their case. Because of this, your insurer will want to know when you get a dog.
Depending on the breed, you may be charged more for your insurance. In some cases, the company may require you to sign a liability waiver if you have a breed they consider more dangerous. It may be tempting to keep your dog a secret from the insurance company because of this, but dog-bite claims could be denied as a result and any court judgment would come out of your pocket. Thus, check with your insurer before you head to the local pound to get a furry friend to ensure incidents with your pet are covered.
To get an insurance quote, contact a broker.