Homeowners insurance is a package policy that combines coverage for the dwelling, detached structures, personal belongings and personal liability. Adequate protection must be in place before the fire occurs.

Keep the following points in mind when reviewing your homeowners insurance policy:

• Pay attention to what the insurance policy does and does not cover.
• Verify policy limits are suitable for your needs.
• Be familiar with claim settlement provisions and restrictions.
• Know your responsibilities following a loss.

It is best to choose a dwelling coverage limit equal to your home's replacement cost. Replacement cost is based on rebuilding the structure with like-quality materials. Not having enough insurance on the dwelling could result in a loss settlement far below the cost of rebuilding or repairing fire damage.

Take time to create or update a personal property inventory to evaluate your personal property insurance needs. A personal property inventory is a detailed room by room record of your belongings. Include brand names, model information, serial numbers and receipts whenever possible. Photographs, videos and appraisals on high value items are useful. Compare your contents insurance needs to the policy's restrictions and limitations. Insurers offer a variety of add-ons to tailor contents insurance for policyholders' unique situations. Ask your homeowners insurance agent for details.

Loss settlement provisions affect claim settlements. Dwelling losses can be covered on a replacement cost, functional replacement cost or guaranteed replacement cost basis. Avoid a coverage surprise by verifying policy terms ahead of a loss. Contents claim, on the other hand, are typically paid on an actual cash value basis. This means depreciation affects the loss settlement. Many insurers offer contents replacement cost coverage fo an additional cost.