Further, many homeowners do not report home improvements or new items in their home inventory to their insurance agent and increase their coverage accordingly. It's very important to keep an up-to-date home inventory list so that you can adjust your coverage to protect these items, and to report home improvements to your agent or insurance company representative as soon as they are completed.

Depending on location, and proximity to possible natural disasters, homeowners should consider additional insurance coverage that specifically covers damage caused by floods, earthquakes, wildfires, and other natural threats. Standard policies generally cover natural disaster calamity caused by wind or wind-driven rain. Many homeowners learned too late after their homes were affected by the floods that followed Hurricane Katrina--after the New Orleans levees broke. Homeowners were stranded without coverage, because their policies did not include the additional flood insurance.

Prepare Now Check with your insurance carrier or agent now rather than later and make sure you have adequate coverage for your personal situation, and that your home value and inventory are up-to-date. You should check in with your agent on your policy at least once a year, or after any major renovations or purchases. Also check with your agent or company representative about whether you should purchase additional polices such as flood or earthquake insurance.