If your dog bites your neighbor's kid, sending him to the hospital, do you have appropriate homeowners' coverage to pay for the medical bills?

If you lose your engagement ring, will the policy pay for the loss or should you have had a rider?

In case of fire, is your computer covered?

The answers to these questions may result in a higher homeowners or renters insurance payment, but they could also save you thousands of dollars in the event of a claim.

In the case of a dog bite, most policies would pay, however, the Insurance Information Institute says that some insurance companies may charge more for such coverage if you own certain breeds.

The following purebreds have been responsible for the greatest number of dog bite-related fatalities between 1979 and 1998, according to the Center for Disease Control & Prevention (CDC). The breeds -- in declining order of fatalities -- include:

"Pit Bull"
Rottweiler
German Shepherd
"Husky"
Malamute
Doberman Pinscher
Chow Chow
Great Dane
Saint Bernard

Don't leave your protection up for debate, it's best to find out what coverage you need for your lifestyle. Not all policies are the same and what your neighbor has may not work for you.

For instance, for home office workers, you may be surprised to find that your computer and office equipment may not be covered. III says the typical homeowners policy provides about $2,500 for business equipment. Add up the replacement cost of a computer, printer, scanner, fax machine, desk and residual equipment and you're way over $2,500.

Insurance experts say most homeowners may have not considered the proper insurance required to cover the added equipment, liability and income loss that can occur with damage to a home-based business. III says you have at least three options:

Homeowners Policy Endorsement. You may be able to add a simple endorsement to your existing homeowners policy to double your standard coverage for business equipment such as computers. The limits of this policy are up to $10,000 and can be added to your policy in $2,500 increments.

In-Home Business Policy/Program. An in-home business policy provides more comprehensive coverage for business equipment and liability than a homeowners policy endorsement. These policies, which may also be called in-home business endorsements, vary significantly depending on the insurer.

Businessowners Policy (BOP). Created specifically for small-to-mid-size businesses, the BOP covers those whose business has grown and is operated in more than one location. A BOP covers business property and equipment, loss of income, extra expense and liability; however, it covers these areas on a much broader scale than the in-home business policy.

For expensive items in the home, such as electronic equipment, jewelry, etc., a policy holder should discuss with their agent the coverage offered through their current policy. Most policies offer between $1,000 and $2,000 for jewelry coverage. If you want full coverage, you may need to add a rider or floater policy that covers the appraised value of the item. In addition, you'll want a policy that covers the loss away from your home as well.

When it comes to your yard, believe it or not, some policies will even cover you there. Trees, plants and shrubs are covered under standard homeowners insurance, says III. "Generally you are covered for 5 percent of the insurance on the house -- up to about $500 per item. Perils covered are theft, fire, lightning, explosion, vandalism, riot and even falling aircraft," according to its Web site. "They are not covered for damage by wind or disease."

Finally, you want to pay special attention to the liability section of your policy. We live in such a litigious society these days and a simple backyard brawl between kids can now turn into a law suit. Liability protection covers the homeowner against lawsuits for bodily injury or property damage the homeowner or any family member causes to other people. It also pays for damage caused by pets. If your child or dog accidentally ruins a neighbor's expensive rug, you are covered -- however, if they destroy your rug, you're simply out of luck.

Knowledge is power, the saying goes, but knowledge also means protection when it comes to your homeowner's policy.

For more articles by M. Anthony Carr, please press here.

Published: November 9, 2001

Use of this article without permission is a violation of federal copyright laws.

Mr. Carr has covered real estate since 1989. He is the author of Real Estate Investing Made Simple. Got a personal real estate issue? Post your questions and comments at Anthony’s blog: commonsenserealestate.blogspot.com.