Losing a home to a fire or a storm can be a traumatic experience for any homeowner. It can be made even worse if your insurance claims payments are lower than you expected.

Claims settlement amounts are largely determined when you purchase your home insurance policy, and then every year at renewal time when coverage limits and deductibles are updated. You can find your coverage limits on your policy’s declarations page. It should show limits and any applicable deductibles for the three most common types of insurance coverage: building or structure, contents and additional living expenses.

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When you have a claim, insurance companies will send out adjusters to evaluate the damage to both the building and the contents of the home.

Dwelling coverage

For example, say you have a fire at your home. The insurance company adjuster will look at the smoke and flame damage caused by the fire. The person will also check water damage resulting from the fire department's efforts to put the flames out.

At a glance: Review your coverage limits and exclusions for . . .

dwelling coverage

Your dwelling.

sewer back-up coverage

Extra insurance for your house, such as building-code upgrades or sewer-backup coverage.

contents coverage

Your home’s contents.

valuables coverage

Extra insurance for your valuables, such as jewelry.

additional living expenses coverage

Additional living expenses if you can’t live at home.

Earthquake insurance

Additional policies for natural disasters such as earthquakes, floods and windstorms.

Your dwelling coverage should be based on the cost to rebuild the house (materials and labor), not its real estate market value. Your agent should be able to help you identify an accurate reconstruction amount at the time you purchase or renew your policy.

The insurance adjuster will review each damaged item separately. The adjuster will then arrive at a complete renovation or rebuilding estimate in order to put the house exactly the way it was before the damage occurred.

Older homes may need to be updated according to new local building codes, depending on the extent of repairs. These code upgrades will increase the cost of returning the home to normal. That cost might not be covered by a home insurance policy.

Stephen T. Surace, vice president of Utica, N.Y.-based Adjusters International, points to Florida as an example. After hurricanes, homeowners who didn’t previously have hurricane shutters found they needed to install them in order to meet building codes. Some had to absorb the cost themselves because their homeowners insurance policies didn’t cover code upgrades.

If your homeowners insurance policy doesn’t include building-code upgrades, you can add “law and ordinance” coverage. Read more about insurance coverage for code upgrades.

And remember that homeowners policies don’t cover every natural disaster. Earthquakes and floods are not covered. In some parts of the country, windstorms are not covered. You can buy special policies for these events.

Contents coverage

Your claims settlement for your belongings might be handled by a different insurance adjuster. Here, too, your settlement check will hinge on the coverage decisions you made. If you purchased only actual cash value coverage, you’ll be reimbursed for the depreciated value of your belongings. So if your couch is five years old, you’ll be reimbursed for a couch of that age.

A better bet is replacement cost coverage. This provides reimbursement for buying new, similar items.

Contents coverage is generally set as a percentage of your dwelling coverage, such as 50%. If your house is insured for $200,000, for example, your belongings might be covered for up to $100,000. Check your policy for your own limits. You can add additional contents coverage if this is not enough. You can also add coverage for specific expensive items, such as jewelry, that aren’t fully covered under your homeowners insurance policy.

The insurance adjuster will inspect the home's damaged contents -- such as furniture, clothing and decorations -- and request an inventory of the family's possessions from the homeowner. They then decide whether these items can be cleaned or repaired, or if they need to be replaced.  

Additional living expenses

The last factor that insurance companies review is additional living expenses. These are the extra costs you incur as a result of not being able to stay in your home while repairs are being made, such as hotel bills. This coverage is often set at 15% of your dwelling coverage. So if your dwelling is insured for $200,000, your limit for additional living expenses would likely be $30,000.

"Maybe you're farther away from your job and you have to drive 15 miles extra to work every day. They should compensate you for those additional miles," says Surace. "These are things that you need to make sure you're paying attention to so that you can submit them with your claim."

Here's more about what you can claim for additional living expenses.

Insurance help for claims

Hiring a public insurance adjuster as soon as the fire or storm has passed can be invaluable when you have a large loss. These professionals know how to handle the labor-intensive paperwork involved in a large insurance claim, such as creating inventories of a home's contents and challenging the insurance company on issues such as cleaning a smoky carpet instead of replacing it with a new one.

"Every loss is different, every home is different and every policy is different, so it makes sense to have a professional on your side. Public adjusters can go through and adequately document your loss and submit that information to the insurance company because, ultimately, providing that documentation is the insured's responsibility," says Surace. "The insurance company's estimators are very busy and they often don't have the time to thoroughly document the loss. In most cases, the insured doesn't have the expertise to do it. That's why you need a professional."

No one wants to file a home insurance claim, but you'll find out the importance of your policy's fine print if you suffer a loss.