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

Consider the following suggestions to avoid a coverage surprise:

• Be familiar with policy coverages, limitations, and exclusions. Look for coverage gaps and ask your local homeowners insurance agent about add-ons to broaden protection for problematic issues.
• Verify that policy limits are suitable for your needs. It's best to match the dwelling limit to the home's full replacement cost. Replacement cost is how much it takes to rebuild the structure using like kind and quality materials. Underinsuring your home may result in a claim settlement far below the cost of repairs. A room-by-room personal property inventory will help you identify contents coverage needs. Talk to your local homeowners insurance agent if you need more protection.
• Be familiar with loss settlement provisions and restrictions. Loss settlements for dwellings and detached structures 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. Depreciation affects loss settlements on personal belongings.
• Know your responsibilities after a loss. Among these obligations - reporting damage as soon as possible, making temporary repairs to prevent additional damage, cooperating in the claim investigation, and more.