Insurance gaps

If you have auto and homeowners insurance policies, you probably feel confident you're covered in case of an incident. However, there are common gaps in insurance that can leave you high and dry. Check your policies to make sure you aren't missing out on important coverage:

Homeowner insurance policies
A majority of people haven't thought about what would happen if their home was totally destroyed. It's not a pleasant scenario to contemplate, but you need to. Many policies don't cover replacing a house, and without this coverage, you'll have to make up the difference between what your insurance pays out and what it really costs to rebuild, MSN Money warned. You should also have an inflation guard on the replacement policy because it will likely cost more to rebuild your home a few years down the road than right now.

Many policies don't cover floods or earthquakes, which can be more common than you'd think in certain areas. Research the most likely weather scenarios for your region and make sure your plan will cover a claim related to them.

If you live in an area that gets very cold in the winter, you definitely want your homeowner insurance plan to cover damage from frozen pipes, but many policies don't. Talk with your agent about adding this coverage.

Car insurance policies
Make sure your auto insurance plan covers everyone it needs to. Some policies will cover people in the household, but if your child goes to college and lives in an off-campus apartment, he or she might not be covered when home on break, 360 Financial Literacy advised.

When a relatively new car is totaled, the amount the plan will pay out may not be enough to pay off the auto loan. If you have a new car, consider getting additional coverage. Many companies offer an endorsement for the difference between the fair market value of the car and the loan balance, making sure you aren't stuck paying a loan for a vehicle you don't even have anymore.

Figure out if your plan offers to pay for rental cars if there's an accident and your car is in the shop for repairs or totaled. If not, think about adding rental-reimbursement coverage to your policy. Additionally, make sure your policy covers you if you're driving a rental. Many policies don't and if you're in an accident in a rental vehicle, you'll end up with a lot of out-of-pocket expenses.

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