Homeowners Insurance protects against lawsuits for negligence and injury and protects home and personal property against damage and loss. Most standard homeowners insurance policies will provide coverage for damage to your home (and many of the items in your home) caused by:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Homeowners insurance also provides coverage for liability claims, medical payments to third parties, and legal costs if a lawsuit is brought against you. The most common amount of liability coverage included in a homeowners policy is $100,000, but you may need much more, depending on your circumstances.

What's not covered?

Read your homeowners insurance policy to find out exactly what is and is not covered. Do this before you suffer a loss, so you won't be surprised. Most insurers exclude damages caused by an act of war, nuclear accident, flood, earthquake, and terrorism, although you may be able to purchase special policies or endorsements that will cover these events.

How much is enough?

Mortgage lenders require that borrowers purchase a minimum amount of homeowners insurance (typically equal to the appraised value or the purchase price of the home). But this is often not the amount of coverage you truly need. Instead, find out how much it would cost to rebuild your home, and consider insuring it for that amount.

Shop around

Get quotes from several insurance companies when shopping for homeowners insurance. But remember, the lowest price does not always equal the best deal. Compare the coverage each policy offers, and check with your state's department of insurance to make sure that each company you're evaluating has a good reputation in the industry.

Issues affecting the insurance premium:

• Age and condition of the home
• Security Features (ie: monitored security system, gated community, etc.)
• Type and frequency of previous losses or claims on previous property policies
• Prior cancellations or non-renewal of previous policies
• Using the same provider for various types of insurance may result in a discount