(This is Part 2 of the series... If you haven't read part 1, click here to start at the beginning of the series.)

Different states have different policy forms and your coverage can even vary from company to company. In Texas for example, there used to be three basic forms: HO-A, HO-B and HO-C. HO-A was the most restrictive and the least expensive; HO-C would cost you a pretty penny but provided the broadest coverage available and the HO-B form fell somewhere in between, offering the most coverage for a reasonable price.

It was an underwriter's dream.

But then the market went to pot and many companies pulled out. Between a slew of hail storms and a boom in black mold claims, insurance companies decided that Texas was too risky and either upped their premiums or backed out altogether.

The market has since stabilized and many companies have come back but with policy forms all their own. Those old standard forms are long gone and have been replaced with more restrictions and more variations than you can count. That means that the form for State Farm may or many not be the same as the policy form you'll get with Allstate. And considering that there's a number of different companies writing again in Texas, what you get and what you think you're getting are very likely to be two different things.

So, let's look at what's covered, what's not covered and what could be up in the air.

Most homeowner policies are written to provide coverage ONLY for the specified perils or dangers to your home. That means that if a peril isn't listed, it isn't covered. This is known as a "Named Perils" policy and depending upon your form, it can be very restrictive or very broad.

Most policies cover the basics:

• Fire, lightening, explosions
• Theft, vandalism and malicious mischief
• Damage from vehicles
• Damage from smoke (sudden and accidental)
• Falling objects from the sky
• Weight of snow, ice and sleet
• Accidental discharge or overflow of water from plumbing
• Freezing of plumbing
• Volcanic eruption
• Riot/Civil Commotion

Keep in mind however, that some states still employ a more restrictive policy form that does not provide coverage forfalling objects, ice/snow/sleet, water/steam discharge and freezing.

If your policy is a named peril policy, then the list of perils are the only hazards covered.

An open perils policy (or all-risk) works just the opposite - if its not excluded in the policy form, its covered.

Most homeowner policies give you the option of adding replacement cost on as an endorsement. Do you really need it? What's the difference?

Actual cash value is just what it sounds like. In the event of a loss, you'll receive payment for what the object is actually worth at the time of the loss. This calculation includes depreciation so it doesn't matter if you paid $5,000 for new carpet four years ago. If the carpet would now only be worth $1,000 (remember, its used), then that's what you'll get.

Replacement cost however, looks at what it would cost you to replace the item at today's prices. So if you paid $5,000 to carpet your house four years ago and it would now cost $8,000 to do it again, you'll receive the $8,000, less your deductible, of course.

While homeowner policies do provide coverage for your contents, most policies impose limits on certain items such as jewelry,furs, computers, etc. If your property is valued at more than the standard limit, you'll have to "schedule" your property in order to get the full value in the event of a loss.

By scheduling, your item will be listed separately on your policy, along with its appraised value. (Yes, an appraisal will be required).

If you're not sure about your limits, talk to your agent. Find out what items are limited and what it would cost to schedule the items separately. Its better to know now than to wait until you have a claim.