If you worry about some calamity whacking your home and your financial well-being, you're right to do so. Homes do burn down sometimes. Or they're damaged by winds and rain. Or floods. Or earthquakes. Don't assume that your homeowner insurance will protect you from all or even most calamities -- read the fine print and see exactly what coverage you've got. Then consider adding more coverage for any gaps you're concerned about. I recently added earthquake insurance to my own policy, for example.

How expensive are residential calamities? Well, home fires reportedly damage more than $6 billion of property per year. That's more than the recent market capitalizations of companies such as Tiffany, Akamai Technologies, Expedia, Hormel, Tyson Foods, Circuit City, and Constellation Brands. Imagine one such company disappearing each year. The 1989 Loma Prieta (Calif.) earthquake caused about $7 billion to $10 billion of property damage, while the 1994 Northridge (Calif.) earthquake's total was around $20 billion -- that's more than the market value of Kellogg or McGraw-Hill.

Interestingly, though, earthquake insurance might be on its way to becoming a hard-to-find protection. Allstate (NYSE:ALL) recently announced that in order to shrink its exposure to major calamities, it's discontinuing most of its 400,000-plus earthquake insurance policies. It's also declining to renew storm coverage in some parts of the country, and you can expect other major insurers to be doing the same thing.

Is this an unfair outrage? Not necessarily. Insurance companies need to write policies that they can cover. One way to not overextend themselves is to decline some policies. Another way is when insurance companies buy insurance for themselves -- this is called "reinsurance." Allstate, for example, recently purchased $2 billion worth of reinsurance "to help cover future losses from named storms, earthquakes and fires-after-earthquakes," according to an AP report. By the way, Warren Buffett's Berkshire Hathaway (NYSE:BRKa, BRKb) is a major reinsurer, making money by offering protection to other insurers.

Learn more about the not-exciting-but-still-critical topic of insurance in our Insurance Center. You may not have thought about some kinds of insurance, such as disability or long-term care insurance, but they're vital for many people. And, of course, properly insuring your property is vital, too. Take a little time to learn more and you may be very happy you did, if some calamity occurs in the future.

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Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway and Expedia. The Fool has an ironclad disclosure policy.