As a cyclist, you've chosen a sports activity that puts you on the road with a lot of vehicles.  No one needs to tell you that drivers have a lot more physical protection than you do on your bike, and it's the cyclist who is most at risk of injury. In 2018, 857 cyclists died in motor vehicle accidents, which is the deadliest year in almost 30 years. (NHTSA)  While you take every precaution to be safe on the road, there are many factors out of your control, and it's possible that something could happen.

If you're involved in an accident, the impacts aren't just physical...they can also be financial.  Be sure that you and your loved ones are protected in case something happens. Below are several issues to consider in order to build a solid protection plan. If your current agent or company isn't suggesting such protection options then perhaps it's time to consider a new provider. 

auto insurance

liability insurance

disability

life insurance

Time to review? We're glad to assist.

If any of the above has hit a nerve, Murphy Insurance would welcome the opportunity to assist you. We can review the policies you currently have to be sure that you're well protected. 

Use our contact form to let us know how we can help.  Or, if you have a specific request, use one of our quote forms.

Republished: May 2023

Where you travel, the vehicle rented, the rental contract and other factors can all impact coverage, so it really depends on the situation. Below is a general overview, as it relates to a Massachusetts Auto Policy (MAP), of issues to consider.

• A MAP is not worldwide. It only covers you in the U.S., it’s territories, Puerto Rico and Canada.
• As long as you have comprehensive and collision coverages on any of your own vehicles, it would cover physical damage to the rental car. Note that this only applies to a 'private passenger vehicle'. A U-Haul truck or 10 person passenger van are commercial vehicles and would not be covered.
• Some rental companies limit where a vehicle can be operated. Driving the car beyond these limitations violates the contract, and your insurance would not cover.
• Most rental agencies require all drivers to be listed and paid for at time of rental. If you allow anyone else to drive and there is an accident, there is no coverage.
• Most rentals consider the rental contract void if driving under the influence. This also voids coverage. MAP excludes “regular use” of another vehicle. If you rent for an extended period, it’s best to check with your insurance company. To avoid this issue, you can add a “Use of Other Autos” endorsement for the rental period and then have it removed.
• Many rental companies often require the auto to be replaced with a new one if a total loss occurs. The MAP only pays for Actual Cash Value not Replacement Cost, which is something to consider.
• If you damage a car and it can’t be rented to others, the rental agency may expect you to pay for lost rental time. Loss of use is not covered by a MAP.

The Collision Damage Waiver (CDW) offered by the rental company can be a solution for situations not covered by your auto policy such as "loss of use". However, you should never assume that the CDW absolves you of all issues. Always read the contract and clearly understand  what is and what is not covered. Also, if you rent a car using a credit card that offers some type of insurance protection, be sure to read the contract and understand coverage limitations.

If you’re planning to rent a car, our Associates are always glad to review specifics of your auto policy protection. However, it’s ultimately your responsibility to understand the terms and requirements of the rental contract and determine if your policy provides the coverage you need.

The risks of becoming temporarily or permanently disabled and the resulting financial impacts are very real and often underestimated. Consider…

• Statistics from the 2000 US Census indicated nearly 20% of the nation’s population had some type of long-lasting condition or disability. (Source: www.naic.org, February 2007)
• The younger you are the greater the chance of being disabled vs. dying.
• Almost 30 percent of people between the ages 35 and 65 will experience a disability that lasts at least 90 days during their working careers. (Source:www.soundfinancialplan.com)
• Approximately 1 out of 7 people between ages 35–65 can expect to become disabled for five years or longer. (Source: www.soundfinancialplan.com)
• Most people spend 65% – 75% of their income to cover monthly expenses.
• Savings can be quickly wiped out. If you save 10% of your annual income, you could wipe out 10 years of your contributions if you were unable to work for a year.
• Approximately 2/3 of initial Social Security Disability claims are denied, and it can take up to 17 months to get funding. (Source: USA Today Online, July 2007)
• 48% of all home foreclosures are brought about by a disability. (Source: National Underwriter, May 2002)
• Half of all bankruptcies result from illnesses or the inability to pay medical bills. (Source: Washington Post, February 2005)
• Disability benefits from an employer’s plan are usually taxable while benefits from policies purchased by an individual are income tax free.

NOTE:  This information is only a general description of the available coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements. Some coverage may be subject to individual insureds meeting underwriting qualifications and to availability within a state.   For further information contact a Murphy Insurance Agency Associate.

What to look for when shopping for renters insurance

If you rent a house or apartment and experience a fire or other disaster, your landlord’s insurance will only cover the costs of repairing the building. To financially protect yourself you will need to buy renters or tenants insurance.

renters insurance protections

Like homeowners insurance, renters insurance includes three key types of financial protection: 

• Coverage for personal possessions
• Liability protection
• Additional living expenses (ALE)

The big difference is that renters insurance doesn't cover the building or structure of the apartment—that's the landlord's responsibility.

The following questions will help you choose the right coverage when you are shopping around for renters insurance or discussing your needs with an insurance professional.

Coverage for personal possessions

Coverage for your personal property is a key component of renters coverage, protecting you from theft, fire and a host of other unfortunate events.

1. How much insurance should I buy?

Make sure you have enough insurance to replace all of your personal possessions in the event of a burglary, fire or other covered disaster. The easiest way to determine the value of all your personal possessions is to create a home inventory—a detailed list of all of your belongings along with their estimated value.

2. Should I choose replacement cost or actual cash value coverage?

Actual cash value policies include a deduction for depreciation (that is, the idea that items lose value over time). Replacement cost coverage is pricier but can be well worth the extra expense if your belongings are damaged or destroyed (think about how much you'd get for your TV used versus how much it would actually cost to replace).

3. What disasters are—and are not—covered?

Renters insurance covers you against losses from fire or smoke, lightning, vandalism, theft, explosion, windstorm and certain types of water damage (such as from a burst pipe or when the tenant upstairs leaves the water running in the bathtub and floods your apartment).

Like standard homeowners policies, most renters insurance policies do not cover floods or earthquakes. Flood coverage is available from the National Flood Insurance Program and a few private insurers. You can get earthquake insurance as a separate policy or have it added as an endorsement to your renters policy, depending on where you live.

4. What is my deductible, and how does it work?

A deductible is an amount of money you responsible for paying before your insurance coverage. For example, if you have a $500 deductible and a fire destroys $5000 worth of furniture, the first $500 is your responsibility and your insurance company will cover $4500.

Renters insurance deductibles are generally specified as a dollar amount, which can be found on the Declarations page of your policy. In general, the larger the deductible, the lower your insurance premium.

5. What is a “floater” and do I need one?

A floater is a separate policy that provides additional coverage for more costly valuables if they are lost or stolen. If you have expensive jewelry, furs, collectibles, sports equipment or musical instruments, consider adding a floater to your policy to protect against their loss.

6. Am I covered if I am traveling or away from home?

Most renters polices include what is called off-premises coverage, which means belongings that are outside of your home are covered against the same disasters listed in your policy. For example, property stolen from your car or a hotel room while you’re traveling would be protected.

liability protection

7. What is liability insurance?

Renters insurance provides liability protection that covers you against lawsuits for bodily injury or property damage done by you, your family members and even your pets. This coverage pays for the cost of defending you in court, up to the limit of your policy.

Your renters policy should also include no-fault medical coverage as part of the liability protection. Medical payments coverage allows someone who gets injured on your property to simply submit his or her medical bills directly to your insurance company so the bills can be paid without resorting to a lawsuit.

8. Do I have enough liability insurance?

Make sure the amount of liability coverage provided by your policy is sufficient to protect your financial and other material assets in the event of a lawsuit.

9. Do I need an umbrella liability policy?

If you need a larger amount of liability protection, consider purchasing a personal umbrella liability policy. An umbrella policy kicks in when you reach the limit on the underlying liability coverage provided by your renters or auto policy. It will also cover you for things such as libel and slander.

Additional living expenses

Additional living expenses (ALE) coverage provides coverage if your home is destroyed by an insured disaster and you need to live elsewhere for a time.

10. What does ALE cover?

The additional living expenses portion of your rental insurance policy pays for hotel bills, temporary rentals, restaurant meals and other expenses you incur while your rental home is being repaired or rebuilt. Essentially, it covers the expenses you would not have to incur if you had your usual roof over your head.

11. How much does ALE cover?

Most policies will reimburse you the full difference between your additional living expenses and your normal living expenses; however, there are generally limits as to the total amount the insurer will pay or time limits specifying how long you’re eligible for the ALE payments. Make sure you’re comfortable with the limits of the policy you choose

Multiple policy and other discounts

12. What types of discounts are offered on renters insurance?

Insurance companies often offer discounts on renters insurance if you have another policy with them—for example, car insurance or business insurance.

You may also get a discount if you:

• Have a security system
• Use smoke detectors
• Use deadbolt locks
• Have good credit
• Stay with the same insurer
• Are over 55 years old

Discounts may vary widely by insurance company and by state, so review your options carefully. 

Source: Insurance Information Institute

Does your business employ one or more people? If so, you need to be prepared for the possibility of an employee lawsuit. Small businesses are just as vulnerable as large corporations… even family businesses aren’t immune. There are steps you can take to prevent lawsuits such as:

• create an employee handbook with set policies and procedures
• document employee acceptance of handbook
• document any disciplinary action

However, no matter how diligent you are, your business can still end up being sued, which is why having employment practices liability insurance (EPLI) for your business is essential.

EPLI insurance is different from general liability protection. It can include coverage for “injury” situations such as:

• Discrimination
• Sexual harassment
• Wrongful termination
• Employment contract breach
• Wrongful discipline
• Emotional distress
• Failure to employ or promote

An EPLI policy generally provides coverage for legal defense and court judgments; however, it may not cover punitive damages or civil and criminal fines.  Coverage availability varies by business type and the insurance company providing the policy.  Some Business Owner Policies may include limited EPLI coverage; however, it may not be sufficient. 

If you don’t have or aren’t sure about your EPLI coverage, our business insurance team can help you review options.

Workers' compensation policies issued to Sole Proprietors and Partnerships do not provide coverage for the individual sole proprietor or partner(s) unless they elect coverage for themselves. This can leave a gap in workers’ compensation coverage as shown below:   

What does this mean to you? 

Sole Proprietors & Partner(s) – Make sure you have elected the proper coverage as most companies already expect that you have it in place. You have bills to pay and could be injured just as any other employee.  Be sure that you are protected so that you'll have income in case you you can't work. 

Other Businesses – Do not accept a certificate of insurance unless it lists the coverage status of the sole proprietor or partner(s). If you hire a sole proprietor or partner, who has not elected coverage, he will revert back to your workers’ compensation policy in an audit. This will increase your premium, especially if there is a loss. Ultimately, it is your decision whether or not to accept a certificate of insurance with excluded sole proprietors or partners; however, we recommend that you require “your” subs to have coverage in place to keep your costs down.  

Whether you own or lease a single business car or an entire fleet of commercial vehicles, you’ll need to purchase commercial auto insurance. Your insurance professional can help you weigh your risks and evaluate coverage options.

But even with insurance in place, you’ll want to take steps to prevent accidents and protect your employees and vehicles. Your business can reduce the chance of an accident by establishing and enforcing the following practices and policies.

Hard-and-fast driving rules

When it comes to the safety of employees and the protection of your vehicles, you should set certain firm driving rules that must be followed at all times, including:

• Mandatory seat belt use - Nearly every state has a seat belt law. Seat belt use helps prevent deaths and limit the severity of injuries in vehicle accidents. There is no reasonable excuse for not using a seat belt.
• Zero tolerance for intoxicants - Even one alcoholic beverage can impair a driver’s reaction time. Employees should never drink or use other intoxicants prior to using business vehicles.
• No cellphone use - Distracted driving is a leading cause of accidents, and cellphone use while driving is banned in some states. Prohibit employees from taking calls or texting while driving.

Vehicle use guidelines

Other rules may be more flexible, but you should consider instituting policies and adhering to the following practices yourself as appropriate:

• Limit non-business use of vehicles - While some employees use the same car for work and personal use, generally limit business vehicle use to work-related travel.
• Slow down - Scheduling should allow sufficient travel time between meetings and assignments. Do not create such a frantic pace of work that employees are encouraged to speed. In addition to reducing the risk of accidents, driving the speed limit also will help control fuel costs.
• Lock and secure vehicles - Employees should always lock vehicles when on the job. Whenever possible, vehicles should be parked in secure, well-lighted areas.

Employee-focused practices to reduce vehicle risk

• Know your employees - Before hiring employees to drive company vehicles, check their driving record with the motor vehicle department for past infractions. Limit or ban driving by employees with a history of accidents or moving violations. Employees should also be required to report any accidents they have while not working. In addition, recognize that some personality traits—such as a bad temper—can raise the risk of auto accidents.
• Provide training - Employees who regularly drive work vehicles—or are taking on a new assignment requiring vehicle use—should be provided with drivers training. This course may just be a refresher for some, but it should cover key safety practices such as following distances and proper backing techniques.
• Recognize safe drivers - For businesses in which driving is central—such as a florist or a moving company—establish a program to recognize and reward safe drivers. You may also want to reward a department or the whole company for accident-free periods.

Responding to an accident

The above practices and policies can help minimize the risk to your business vehicles, but they cannot entirely prevent accidents from happening. If a business vehicle is involved in an accident, you’ll want to help your employee-driver respond appropriately and proceed with filing an insurance claim. The following practices and steps will help your business and the involved employee recover and get back to work.

• Establish procedures in the event of an accident - Employees using company vehicles should be trained what to do if an accident occurs. This includes not leaving the scene of an accident, contacting the police, and collecting information (license plate numbers, contact information, insurance information, etc.) from the affected parties and any witnesses. The accident should also be reported to appropriate personnel at work. Consider using the incident as an opportunity to educate all employees who drive company vehicles about what to do if they are involved in an accident.
• Contact your insurance professional and file a claim with your insurer - As soon as possible, contact your insurance professional to report the accident and begin the claims filing process. It’s especially important to work immediately with your insurance team if anyone has been injured in the accident. Follow the guidance of your insurer in a timely manner, such as getting estimates for repairs.

Remember too, that auto insurance claims are not limited to accidents. You may also need to file a claim if your vehicle is vandalized, stolen or damaged from an event other than an accident, such as fire or severe weather.

Source: Insurance Information Institute

No matter how responsible and safe you are, the risk exists that one day you or someone in your household could be sued for causing “injury” to someone due to an accident, negligence or some other liability situation. The news is filled with examples of what can happen if you’re in the wrong place at the wrong time.

Family, Home, Career Status Should Be Reflected In Your Policy Coverage

Our insurance needs change as circumstances in our lives change, which is why we recommend doing an annual insurance review. When you’re reviewing your insurance coverage, these ten questions can help you figure out whether you may need to talk to your insurance professional about making a change to your coverage.

1. Have you gotten married or divorced?

If you have gotten married, you may qualify for a discount on your auto insurance. Couples may bring two cars into the relationship and two different auto insurance companies, so take the opportunity to review your existing coverage and see which company offers the best combination of price and service.

If you are merging two households, you may need to update your homeowners insurance. And you may want to consider increasing your insurance for any new valuables received, such as wedding gifts, and for jewelry, such as wedding and engagement rings.

After getting married, it is important to review your life insurance needs. If one spouse is not working, he or she might be dependent on the working spouse’s income; if so, reviewing life and disability insurance coverage is prudent. The spouse who is not working outside the home should also consider having a separate life insurance policy because, in the event of premature death, the services he or she provides for the household would need to be replaced, and that could prove costly to the surviving spouse. Moreover, even if both spouses are working, couples often make financial commitments based on both incomes so the loss of one spouse’s income due to death or disability could be financially devastating without adequate insurance.

In the other hand, if you got divorced over the past year, you will probably no longer be sharing a car with your former spouse and have likely moved to a different residence. If this is the case, you should inform your insurer as you will need to set up separate auto and homeowners policies.

2. Have you had a baby?

If you have recently added a child to your family, whether by birth or adoption, it is important to review your life insurance and disability income protection.

If you are planning for your life insurance to match your survivors’ expenses after your death, the new child will no doubt add to those expenses, requiring more life insurance to keep your family secure. If you plan to save for your child's college education, life insurance can assure completion of that plan. And if you keep your current life insurance policy, don’t forget to update the beneficiary designations to include the new child.

3. Did your teenager get a drivers license?

It is generally cheaper to add your teenagers to your auto insurance policy than for them to purchase their own. If they are going to be driving their own car, consider insuring it with your company so you can get a multi-car discount. And choose the car carefully—the type of car a young person drives can dramatically affect the price of insurance. You and your teens should choose a car that is easy to drive and would offer protection in the event of a crash.

Also, encourage your kids to get good grades and to take a driver training course. Most companies will give discounts for getting at least a “B” average in school and for taking recognized driving courses.

If your teenagers move at least 100 miles from home—for example, to go to college—you can get a discount for the time they are not around to drive the car (assuming they leave the car at home). 

4. Have you switched jobs or experienced a significant change in your income?

If you had life and disability insurance through your former employer, and your new employer does not provide equivalent protection, you can replace the “lost” coverage with individual policies.

In the case of an income increase, you may have taken on additional financial commitments that your survivors will depend on. Make sure to review your life and disability insurance to ensure it is adequate to maintain those commitments.

If your income decreased, you may want to cut your life insurance premiums. Term life insurance is a good option, as the premium rates are very reasonable. And if you already have two or more policies you might be able to replace both with a single policy at a lower rate because you may reach a “milestone” amount of insurance. (For example, at many life insurance companies, $500,000 of insurance costs less than $450,000 because of the milestone discount.) But don’t drop existing life insurance until after you have a new policy in place.

5. Have you done extensive renovations on your home?

If you have made major improvements to your home, such as adding a new room, enclosing a porch or expanding a kitchen or bathroom, you risk being underinsured if you don’t report the changes to your insurance company. An increase in the value of the structure of the home may require an increase to your homeowners insurance coverage limits.

And don’t overlook new structures outside of your home. If you built a gazebo, a new shed for your tools or installed a pool or hot tub, you should speak to your insurance professional.

If, as part of a renovation, you purchase furniture, exercise equipment or electronics, you may need to increase the amount of insurance you have on your personal possessions. Keep receipts and add any new items to your home inventory. To create a personal home inventory, try the I.I.I.’s free Know Your Stuff® Home Inventory Tool.

6. Have you decided to buy a second home?

If you are searching for a vacation home or a second home you might retire to, make sure you research the availability and cost of homeowners insurance before you commit to the purchase.

The very factors that make a vacation home seem ideal, whether it is a waterfront property or a mountain retreat, can often introduce risks that make it costly and difficult to insure, such as proximity to the coast and the likelihood that it will be vacant for long periods of time.

In the event you have already bought a vacation home, don’t skimp on the insurance. The risk of theft or disaster is just as significant, if not more so, in a second home as in your primary residence.

If your new property is close to the water, be sure to ask about flood insurance. Damage to your home or belongings resulting from flood is not covered under standard homeowners insurance policies. Flood insurance is available from the National Flood Insurance Program (NFIP), as well as some private insurers, and is generally sold though private agents and brokers. You can ask your insurance professional whether your home is at risk for flood, or enter your address on the NFIP website to find out whether your home is in a flood zone. If you have a very valuable home, some homeowners insurers offer excess flood coverage over and above that provided by the NFIP policies.

7. Have you acquired any new valuables such as jewelry, electronic equipment, fine art, antiques?

A standard homeowners policy offers only limited coverage for highly valuable items. If you have made purchases or received gifts that exceed these limits, you should consider supplementing your policy with a floater or endorsement, a separate policy that provides additional insurance for your valuables and covers them for perils not included in your policy, such as accidental loss. Before purchasing a floater, the items covered must be professionally appraised. Keep receipts and add the new items to your home inventory.

8. Have you signed a lease on a house or apartment?

If you are renting a home, your landlord is responsible for insuring the structure of the building, but not for insuring your possessions—that is up to you. If you want to be covered against losses from theft and catastrophes such as fire, lightning and windstorm damage, renters insurance is a good investment. Like homeowners insurance, renters insurance includes liability, which covers your responsibility to other people injured at your home, or elsewhere, by you and pays legal defense costs if you are taken to court.

Regardless of whether you are a renter or an owner, you will have the following options when it comes to insuring your possessions:

• Actual cash value pays to replace your home or possessions minus a deduction for depreciation.
• Replacement cost pays the cost of rebuilding or repairing your home or replacing your possessions without a deduction for depreciation. Replacement cost coverage is preferable and typically doesn't cost significantly more especially when you consider the additional value of the coverage.

Think carefully about what your financial position would be in the aftermath of a disaster, and make sure you have the type of policy that is right for you.

9. Have you joined a carpool?

If you are a frequent carpool driver, whether it is to work, or ferrying kids to school and other activities, your liability insurance should reflect the increased risk of additional passengers in the automobile. Check with your insurance professional to make sure your coverage is adequate.

10. Have you retired?

If you commuted regularly to your job, in retirement your mileage has likely plummeted. If so, you should report it to your auto insurer as it could significantly lower the cost of your auto insurance premiums. Furthermore, drivers over the age of 50-55 may get a discount, depending on the insurance company.

Source: Insurance Information Institute

Use these guidelines to protect your home and your assets with adequate insurance coverage

If disaster strikes, you'll want enough homeowners insurance to rebuild the structure of your home, to help replace your belongings, to defray costs if you're unable to live in your home and to protect your financial assets in the event of liability to others. Use these guidelines to help determine the coverage and amounts you need.

Determine how much insurance you need for your home's structure

Standard homeowners policies provide coverage for disasters such as damage due to fire, lightning, hail and explosions. Those who live in areas where there is risk of flood or earthquake will need coverage for those disasters, as well. In every case, you'll want the limits on your policy to be high enough to cover the cost of rebuilding your home.

The price you paid for your home—or the current market price—may be more or less than the cost to rebuild. And if the limit of your insurance policy is based on your mortgage (as some banks require), it may not adequately cover the cost of rebuilding.

While your insurer will provide a recommended coverage limit for the structure of your home, it’s a good idea to educate yourself as well. To make sure your home has the right amount of structural coverage, consider:

Major factors that will impact home rebuilding costs

• Local construction costs
• The square footage of the structure

For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local, per-square-foot building costs. (Note that the land is not factored into rebuilding estimates.) To find out construction costs in your community, call your local real estate agent, builders association or insurance agent.

Details that can impact home rebuilding costs

• The type of exterior wall construction—frame, masonry (brick or stone) or veneer
• The style of the house, for example, ranch or colonial
• The number of bathrooms and other rooms
• The type of roof and materials used
• Other structures on the premises such as garages, sheds
• Special features such as fireplaces, exterior trim or arched windows
• Whether the house—or a part of it—was custom built
• Improvements you've made that have added value to your home, such as the addition of second bathroom, or a kitchen renovation

Other considerations

Whether or not your home is up to code

Building codes are updated periodically and may have changed significantly since your home was built. In the event of damage, you may be required to rebuild your home to the new codes and homeowners insurance policies (even a guaranteed replacement cost policy—see below) generally won't pay for that extra expense. If you suspect that elements of your home are not up to current building codes, consider getting an endorsement to your policy called an Ordinance or Law, which pays a specified amount toward bringing a house up to code during a covered repair.

Whether your home is older with hard-to-replace features

Lovely, special features on older homes—like wall and ceiling moldings and carvings—are expensive to recreate and some insurance companies may not offer replacement policies for that reason.

If you own an older home, you may have to buy a modified replacement cost policy. This means that instead of repairing or replacing features typical of older homes—like plaster walls—with like materials, the policy will pay for repairs using today's standard building materials and construction techniques.

Allowing for possible increased cost of building materials

Inflation can impact rebuilding costs. If you plan on owning your home for a while, consider adding an inflation guard clause to your policy. An inflation guard automatically adjusts the dwelling limit to reflect current construction costs in your area when you renew your insurance.

After a major catastrophe such as a hurricane or tornado, construction costs may rise suddenly because the price of building materials and construction workers increase due to the widespread demand. This price bump may push rebuilding costs above your homeowners policy limits and leave you short. To protect against this possibility, a guaranteed replacement cost policy will pay whatever it costs to rebuild your home as it was before the disaster. Similarly, an extended replacement cost policy will pay an extra 20 percent above the limits (possibly more, depending on the insurance company).

Determine how much insurance you need for your possessions

Most homeowners insurance policies provide coverage for your belongings at about 50 to 70 percent of the insurance on your dwelling. However, that standard amount may or may not be enough. To learn if you have enough coverage:

Conduct a home inventory of your personal possessions

In order to accurately assess the value of what you own, it's highly advisable to conduct a home inventory. A detailed list of your belongings will not only help you figure out how much insurance you need, but it will also serve as a convenient record. In the event any or all of your stuff is stolen or damaged by a disaster an inventory will make filing a claim much easier.

There are several apps available to help you take a home inventory, and our article on how to create a home inventory can help, as well.

While you're reviewing your possessions, think about whether you want to insure them for actual cash value (where the policy would pay less money for older items than you paid for them new) or for replacement cost (which would cover to replace the items). The price of replacement cost coverage for homeowners is about 10 percent more but is generally a worthwhile investment in the long run. (Note that flood insurance for belongings is only available on an actual cash value basis.)

If you think you need more coverage, contact your insurance professional and ask about higher limits for your personal possessions.

Take stock of your expensive items

There are limits on how much a standard homeowners insurance policy will cover for items such as jewelry, silverware, collectibles and furs. For example, jewelry coverage may be limited to under $2,000. Some insurance companies may also place a limit on what they will pay for computers.

Check your policy (or ask your insurance professional) for the limits of your coverage for any expensive items. If your home inventory includes items for which the limits are too low, consider buying a special personal property floater or an endorsement. This will allow you to insure valuables individually or as a collection, with significantly higher coverage limits.

Determine how much additional living expense insurance you need

Additional Living Expenses (ALE) is a very important feature of a standard homeowners insurance policy. If you can't live in your home due to a fire, severe storm or other insured disaster, ALE pays the additional costs of temporarily living elsewhere. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt.

If you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.

Many policies provide coverage for about 20 percent of the insurance on your house. But ALE coverage limits vary from company to company. For example, there are policies that provide an unlimited amount of coverage, for a limited amount of time, while others may only set limits on the amount of coverage. In most cases, you can increase ALE coverage for an additional premium.

Determine how much liability insurance you need

The liability portion of homeowners insurance covers you against lawsuits for bodily injury or property damage that you or family members or pets cause to other people, as well as court costs incurred and damages awarded.

You should have enough liability insurance to protect your assets. Most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available and, increasingly, it is recommended that homeowners consider purchasing at least $300,000 to $500,000 worth of liability coverage.

If you own property and or have investments and savings that are worth more than the liability limits in your policy, consider purchasing a separate excess liability or umbrella policy.

Consider an umbrella or excess liability policy

Umbrella or excess liability policies provide coverage over and above your standard home (or auto) liability policy limits. These policies start to pay after you have used up the liability insurance in your underlying policy. In addition to providing additional dollar amount coverage, umbrella or excess liability often offers broader coverage than standard policies.

The cost of an umbrella policy depends on how much underlying insurance you have and the kind of risk you represent. The greater the underlying liability coverage you have, the cheaper the umbrella or excess policy. To write an umbrella or excess policy, most companies will require a minimum of $300,000 underlying liability insurance on your standard homeowners policy.

Source: Insurance Information Institute