7 Key Things You Should Know About Your Home Insurance

1. Do you have the right insurance?
You should know what you have, and you should know ahead of time that you are covered. Look at your insurance coverage in four key areas: the structure of your house, your belongings, your liability to others and your living expenses if you're forced out.

2. Do you have replacement value insurance? You want to be able to replace everything you lost with similar, new items. And make sure that your policy spells out that both your home and its contents are covered by replacement-value insurance.

3. Understand the claims process. Have your agent explain exactly how claims are handled, especially when it comes to writing you a check. Do you receive your entire claim upfront, or just a fraction? Does the company pay you for all the things you've lost, or only those things that you replace?

4. Take inventory. Filing a claim involves two steps -- proving you owned certain items and verifying their worth. This is a lot easier to do when you still have your things. Go through your home with a video camera & stash your video or photos in a safety deposit box with a copy of your policy.

5. Buy floaters. Many times, homeowners and renter's policies limit the amount you can collect on some big-ticket items -- usually things like computer equipment, jewelry, furs and fine collectibles -- to a fraction of the replacement value. If this is the case, you need to pick up a special policy known as a "floater" or "endorsement" for each of those items.

6. Keep pace with inflation. Talk to your agent to verify that your coverage amounts are still realistic. And when you make an improvement, add it to the total.

7. After a life-changing event, call your agent. Getting married or divorced? Are the kids moving out -- or back in? The amount of insurance you need -- and the items you want to cover -- change over the years. Be sure you keep your policies and inventories up to date.