There are two types of coverage for your possessions: replacement cost and actual cash value. Replacement cost is better for you, the homeowner.

• Under replacement cost coverage, the insurance will cover the cost of replacing property that is damaged or stolen, up to a maximum dollar amount.

• Under actual cash value, the insurance will cover the cost of replacing the property minus an allowance for depreciation. If you have, say, older furniture, that allowance could be quite significant. Unless your policy specifically says it provides replacement cost coverage, the coverage is for actual cash value.

Note. Remember, homeowners policies also have limits on coverage for such items as jewelry, fine art and computer equipment. If you have significant amounts of jewelry, fine art and computer equipment, as well as any valuable collections (coins, baseball cards, etc.), there probably isn't enough coverage in the standard homeowners policy for these items.

Your homeowners policy provides coverage for items from your residence that are, for one reason or another, transported elsewhere and subsequently damaged, lost or stolen. In fact, if your car is stolen and you have, say, hundreds of CDs in it, you would make a claim on your homeowners policy for the CDs, not your auto policy.

Tip. Keep in mind, though, that your homeowners insurance has a deductible. Unless the property lost has a value significantly greater than your deductible, it may not make much sense to file a claim.

Tip. For your own protection, you should take written and visual (still pictures or video) inventories of everything you own in your home and in other buildings on your property. Include all furniture (indoor and outdoor), appliances, stereos, computers and other electronic equipment, hobby materials and recreational equipment, china, silverware, kitchen equipment, linens, jewelry and clothing.

For the major items (computers, televisions, stereo systems, etc.), write down the serial number, make or model number, purchase price, present value and date of purchase of each item. If you have the receipts for the items, attach them to the inventory. Make at least two copies of the inventory and store one of those copies offsite - a safe deposit box is a good place. Store the pictures or video of the inventory offsite as well.