Homeowners Insurance: Are You Sure You're Covered?

Being smack dab in the middle of the peak of the Atlantic hurricane season tends to make us all think about homeowner's insurance. What's the most important thing you need to know about your homeowners insurance? The answer: What it does — and doesn't — cover.

The list may not be as obvious as you think. Regular homeowners insurance will cover damage from fires, tornadoes and pieces airplanes or space shuttles that fall from the sky, but it won't cover havoc wreaked by flooding, hurricanes, earthquakes, acts of terrorism or nuclear meltdowns.

Here are the basics you should have from your homeowners insurance:

• You want enough coverage to rebuild your home from scratch. Don't count on your insurance agent to give you an accurate figure. Get a square-footage estimate of the reconstruction value. It generally isn't the same as the fair market value. Remember: A "guaranteed replacement" policy isn't necessarily a guarantee.
• Get "replacement cost coverage" rather than "actual cash value coverage" for your belongings. Make an inventory of your possessions and the cost to replace them. You'll likely need a rider to protect valuables like furs, jewelry, fine art and antiques.
• Check your policy's "loss of use" provisions. How long will your insurer pay your rent while your damaged home is being repaired or rebuilt?

One survey found that 58% of households have too little to adequately protect their property. Don't wait until after a tragedy strikes. Check to make sure you're adequately covered BEFORE a storm or fire strikes.