Natural disasters happen. Make sure you are prepared.

Having the right insurance policies in place can soften the blows from unexpected events that would otherwise mean financial catastrophe for you and your family. But if you’re like many people, you may not fully understand all the policies you have, let alone whether they’re adequate to meet your needs.

Here are some tips to help you assess your current coverage and decide whether you need to make any changes.

Homeowners insurance may protect you financially in the event of everything from natural disasters to household mishaps. But as millions of homeowners affected by Hurricane Sandy found out the hard way, standard homeowners insurance doesn’t protect you against every type of danger.

One of the most common mistakes people make about homeowners insurance is thinking that it covers flood damage. But typical policies specifically exclude flood damage from their coverage. To get flood protection, you have to obtain additional insurance from the National Flood Insurance Program. Similarly, in earthquake-prone areas, you may need to get special earthquake coverage added to your policy, or else it won’t necessarily cover damage from a quake.

Even if you have good homeowners insurance, it may not cover all of your belongings. Often, insurers will only cover up to a certain amount for high-value items like jewelry, cash, and artwork as part of their base policies. You’ll need to add special provisions for protection above that amount. So if you’ve obtained any particularly valuable items in the past year, talk to your insurance company about what you need to do to get them covered.

Be sure to check with your insurance agent to make sure you are properly covered.

Dan Caplinger
Daily Finance