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Pam's Insurance Site

When I bought my first house, I was already going into a lot of debt. I didn't have the money to seriously insure it, so I bought only the bare minimum without consulting an insurance professional. That was a big mistake on my part. It could have turned out alright. That is, if my house hadn't been in the path of a huge storm. Huge gale winds knocked a tree down straight through my roof. My house was practically destroyed, and my minimal policy didn't cover nearly enough. I spent years and years trying to get myself out of that financial mess. Since then, I have always been very cautious in learning about insurance and talking to the real professionals.

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Two Times You Need To Reevaluate Your Homeowner's Insurance Coverage

It's common for homeowners to purchase insurance for their houses and then never ever look at their policies again until they need to file claims. However, it's critical you review your policy on a regular basis to ensure it still fits your needs and preferences. In particular, you will want to go over your policy with a broker or insurance agent if one of these two things happen in your life.

You Get a Dog

Dogs make wonderful companions and fearless protectors. Unfortunately, your dog can also be the cause of financial ruin, and not because your canine friend will only eat the most expensive dog food available. A dog means the possibility of dog bites which, in turn, can lead to being sued by the victim for damages if your dog nips someone. While the average payout for a dog bite claim was $26,166, people have sued and won much bigger amounts.

Although the victim may have been bitten on your property, there's no guarantee your homeowner's insurance will pay the claim. Thus, you need to read your policy to see whether dog bites are included in the coverage and if there are any breed restrictions. For instance, the insurance company may pay dog bit claims but not for certain breeds of dogs (e.g. pit bulls, Rottweilers).

If your policy excludes dog bites, either see if you can purchase a rider to add on to your insurance or shop around for a new policy altogether.

You Start a Home Business

In this age of the internet and the gig economy, it's much easier to start and run a business out of your home. While you can make quite a bit of extra cash to pay your mortgage and other bills, having a home business can cause trouble with your homeowner's insurance company. Many policies will exclude claims related to the business outright. Other companies may cancel the policy if the business increases the risk of damage to the home to a significant degree.

Thus, you should check your policy to see if your home business is covered and to what degree. Like with your dog, it may be necessary to add a rider that will pay out if your home business damages the house. Alternatively, you may have to purchase business insurance to get the exact coverage you need.

For more information about these and other issues that may require a reevaluation of your homeowner's insurance policy, contact an insurance company.