When Do You Need to Review Your Homeowners Insurance Policy?
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I recently took a leisurely walk with a friend—who also happens to be a client—to catch up. The visit quickly turned into a lesson on homeowners insurance and the importance of regularly reviewing your insurance policy.
My friend told me how excited she was that her daughter was coming home for the summer after finishing her freshman year at a college out of state, and that she was getting ready to rent an off-campus apartment for her daughter, who would be sharing it with another student for the next school year.
“Who is the responsible party signing the lease?” I asked. If she was that party, I reminded her, this location would need to be added to her homeowners insurance in order to extend the liability coverage to the new apartment. I also reminded her that she might need renters insurance, and that the new roommate might need her own renters insurance policy as well.
Needless to say, that walk had us both taking out our smartphones and adding all of this to our to-do lists.
You may not realize it, but there are many situations that occur on a daily basis that could warrant a visit to your insurance agent for a review of your homeowners insurance policy.
You’re doing some home improvements.
Are you renovating your home and adding square footage to your living area? Then you will almost certainly need to increase the replacement cost coverage on your house.
Some homeowner policies will not offer coverage if your home is currently under major construction, and you will not be able to purchase a new policy until renovations are complete. Therefore, it is best to contact your agent prior to making any changes to the structure of your home.
A reminder: All contractors you hire must carry their own liability and workers’ compensation coverage, as your policy will not cover for injuries to workers while they are on the job at your home.
You’re bringing home a new dog.
Your child wants a dog in the worst way and you finally give in, go to your local animal shelter, and bring home a cute new puppy.
After you bring your new furry friend home, it’s time to think about your homeowners insurance policy. Do you know how much liability coverage you have on your policy? Do you have all risk coverage—which covers losses from all causes not specifically excluded from your policy—along with replacement cost coverage for your personal property, so you can replace items if they’re damaged by your new dog?
While he may be your new best friend, your rambunctious new dog increases the chances that damage will occur in your home or on a neighbor’s property. It also increases the chances of accidental injury to others. Some homeowner policies have dog exclusions for all or prohibited breeds for any liability suits that arise, so be sure to ask your agent if this is the case for your policy—preferably before you bring the new pup home.
You’ve recently purchased a new toy for the kids.
It may come as a surprise, but even some children’s toys can warrant an insurance policy review.
For example, you surprise your son with a new electric kids’ car for his birthday. It fits him and a friend, and it allows them to go driving around the yard—or the entire neighborhood. It sounds harmless, but you could be on the hook for the cost of your child’s friend’s medical bills if he or she is injured. In some states, if the car is driven off your property and your child’s friend is seriously injured, your liability coverage could exclude the claim, leaving you responsible for the bills.
If this is the case, you may be able to add an endorsement onto your policy that could protect you in this situation. It’s worth a call to your insurance agent to find out what your policy covers.
These aren’t the only situations that should prompt an insurance policy review. You may also want to reevaluate your insurance policy after buying an expensive piece of jewelry or antique; receiving a fur coat as a gift; starting a home-based business; taking in a renter; or moving in with a boyfriend, girlfriend, or partner.
A good time to review your coverage is when you receive your annual renewal policy. Ask yourself if there have been any life changes that could impact your policy, and call your agent to find out whether they warrant a change in insurance coverage.
Heidi Petschauer Fox graduated from St. John’s University in Queens, N.Y., in 1983 with a B.S. in management. She joined her late father’s firm, Petschauer Insurance, in 1982, became principal in 1995, and now shares ownership with her partner and cousin, Erwin Petschauer. She received her Certified Insurance Counselor (CIC) designation in 1997. She currently facilitates the professional and creative development of the entire Petschauer team and manages the personal lines and social media departments.
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