Homeowners:

• Buy, at a minimum, full replacement or replacement cost coverage. This means the structure can be replaced up to the limits specified in the policy.
• Investigate buying a guaranteed replacement cost policy. When and where available, these policies can pay to rebuild your house, including improvements, at today's prices, regardless of the limits of the policy.
• Have your home periodically reappraised to be sure the policy reflects the real replacement cost.
• Update the policy to include any home improvements, such as basement refinishing. Annual automatic increases may not be enough to cover these.
• Buy a policy that covers the replacement cost of your possessions. Standard coverage only pays for the actual cash value (replacement cost discounted for age or use).
• Be very clear about what the policy will and will not cover, and how the deductibles work (the part you pay before the policy pays).
• Check state-operated or federally operated insurance pools if you find it difficult to obtain private coverage because of a recent disaster. Premiums often run higher than market rates, but this is better than no coverage.
• Use your home inventory list to check that your policy's coverage matches the value of your possessions.

Renters:

• If you are renting, consider locating outside a high risk flood area or away from a fault line.
• Buy renter's insurance, which pays for damaged, destroyed, or stolen personal property. Your landlord's insurance won't cover damage to or loss of your possessions. Also, consider special coverage like flood insurance for your belongings.
• Be clear about what a policy will cover. Some policies cover more than others. For example, will the policy pay for living expenses if you have to live somewhere else temporarily or for damage from sewer backup?
• Comparison shop for the best coverage at the best price. Other than government flood insurance, policies vary from company to company. Policies in most areas are very affordable. Start with the company that insures your car. Discounts are often available if you carry more than one policy with a company.

Moving?

Select a home in an area not on a fault line, in a flood area, or at risk from coastal erosion.

Special coverage:

Insurance for renters and homeowners won't cover certain types of losses. Ask your insurance agent or financial planner about special or additional coverage for the following:

• Floods—Homeowner policies don't cover damage from flooding. Call your current insurance company or agent first about getting coverage. If your company doesn't provide flood insurance, call the National Flood Insurance Program, which can provide you with the name of an agent in your area who writes flood insurance.
• Earthquakes—Premiums typically are high ($5,000 annually for a $200,000 home), and deductibles may range from 5 to 20 percent of the policy's coverage. Still, such coverage may be better than no coverage. (Earthquake coverage for the contents of a home usually is separate. You also may need separate coverage for masonry and plate glass.)
• Home Offices—Some policies automatically extend coverage to computer equipment and a few other items of business property. Talk to your agent to determine what items would or would not be covered. If necessary, you could buy additional business coverage at a modest cost. Or it may be better to buy a separate small business policy, which would also provide more coverage.
• Building codes—Ask your agent about additional insurance to cover the costs of meeting new, stricter building codes. Frequently, after a disaster people get socked with rebuilding costs that are much higher because building codes have changed. All current codes must be met when rebuilding. Consider additional structural improvements that provide more protection.
• Other potential problems—This would include problems such as underground mines (located beneath your property) sewer backup, or mudslides.
• Big-ticket items—Purchase additional coverage for specific jewelry, collectibles, artwork, furs or other big-ticket items.

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