Understanding Your Homeowner Insurance Policy As homeowners, none of us can ever truly be prepared for tornadoes, floods or other natural disasters. Having adequate insurance can reduce potential losses. Surveys have found that nearly half of homeowners couldn't identify or verify the value of all their possessions if they were lost in a disaster or know whether their insurance will cover all of their home repairs. Most Home owner Insurance policies do not cover: flood, earthquake, landslide, mudslide, sewer backup or identity theft. Your homeowner policy may not cover claims related to: dog bites, swimming pools, or operating a business from your home. Sites such as Insure.com and MSN Money.com  are good places to help you better understand your policy (cash value or replacement costs?), know your coverage (are floods, earthquakes and water-line breaks covered?) and document your valuables (just what do you have, how much is it worth and how do you prove it?).