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home-insurance-oversightsWhen misfortunes occur and you need to make a home insurance claim, the last thing you want is to learn that your policy is inadequate. If you periodically review your insurance policies and tell your agent about your changing needs for coverage, you can avoid the feeling of panic that strikes when you suffer a home-related loss.

Ron Reitz, president of San Diego-based Quality Claims Management, a nationally licensed public insurance adjuster, says preparation is key to avoiding those dreaded "OMG!" insurance moments. Here are five suggestions for mitigating financial disaster.

1. Review the limits of your home insurance coverage

"Once somebody files a claim, they quickly learn all the deficiencies in their policy," Reitz says. Before you need to use your homeowner insurance, he suggests asking yourself if you have sufficient coverage. If you have made recent home improvements, make sure they are reflected in your insurance policy. "I recommend doing that on an annual basis," he says.

Rather than simply chatting with your insurance agent on the phone, Reitz suggests having him or her visit your home. "I like to have them come out to the house and take a look to make sure I have all the coverage I need," he explains. "Each policy has limits. If you have antiques or a firearm or you or anything of value, you need to look at the sublimits and make sure you have coverage."

2. Take inventory of your possessions

If you wait until after a burglary or a fire to create an inventory of your valuables, chances are good that you will forget something important – plus countless small belongings. Few people can recall all of their lost possessions during stressful situations. If your dwelling has been damaged, your first priority is likely finding temporary shelter or arranging for home repairs.

Jim Armitage, an insurance agent in Arcadia, Calif., observes that many people are left in a state of shock after a catastrophic loss. "Not only are you kind of numb, but you forget the belongings that you have," he says. To be prepared, make a list of the valuables in your home or simply walk through each room with a camera. You can take photographs or make a video. Don't forget the inside of drawers and closets where valuables are kept out of sight.

If you have remodeled your home, its value has likely increased and raised your insurance needs, says Armitage. "A lot of people remodel kitchens," he notes. "They add a bedroom. They never even think of it from an insurance standpoint, but if you add some square footage, you are adding value."

3. Know what your valuables are truly worth

Reitz says it's unwise to rely solely on your insurance company to establish the value of your property. It's much better to bring in an appraiser before a problem occurs to determine the replacement cost of expensive items.

"If you do have a loss, it is the responsibility of the insured to fully document everything they are claiming," Reitz says. "You have to be able to identify each item, identify the age of each item and identify what the replacement cost is."

Most people will need professional help, he says. "You can get an appraiser. Oftentimes that is necessary. Insurance companies often will use garage-sale type prices."

4. Do not forget the outside of your home

If you want to be fully prepared to make a home insurance claim, document the exterior of your dwelling, too, Reitz says. Inventory your yard just as you would the interior of your house. Do you have an outdoor kitchen or fire pit? Expensive plants or landscaping?

5. Keep important insurance documents in a safe place

It’s counterproductive to make a record of your possessions if that document is stored where it can be lost in a flood or fire. Reitz recommends that you keep copies of your inventory in a safe place outside the home. Most people have the means to create electronic copies that can be put onto disks or other storage devices. "With today's technology it is easy to scan everything," he says. Put your inventory and photos on a flash drive and keep it at work.

For insurance documents that you plan to keep in your home, Reitz suggests you create an "emergency box" of important papers that you can grab quickly if you ever need to leave your home in a hurry.