Before buying it in the first place, you must figure your basic homeowner insurance requirements. Experts in and outside the industry, including Consumer Reports, recommend that you consider:
*Your house. Carefully decide the coverage you want on your house and property. Homeowners' insurance generally covers losses caused by fire, wind, hail, lightning, vandalism and theft. Catastrophic damages -- that caused by war, nuclear accidents, floods -- usually are excluded.
Do not insure for more than replacement cost. If it's insured for $150,000 and costs $100,000 to replace, you'd get a maximum of $100,000 but would have paid premiums for $150,000. If only insuring on a partial replacement basis, coverage should be for at least 80 percent of full replacement cost.
*Trees and ornamental plantings. Coverage usually equal to 5 percent of the dwelling amount, with ceilings on each individual unit; $100,000 dwelling, $5,000 on trees and ornamentals, $500 each.
*Household contents, personal property. Usually equal to half the coverage on your main dwelling, but with varying ceilings on different items, such as antiques, silver, gold and pewterware, jewelry, coin collections, valuable papers, stamp collections, firearms, cameras and photographic equipment. Floater policies can be written for coverage in excess of the ceiling amounts.
*Liability for property damage and personal injury. A guest falls through your staircase railing and is seriously injured. Someone falls through a termite-damaged floor and requires hospitalization. You are at fault and are liable to be sued for medical and other related losses. Minimal coverage usually is $25,000.
*Other insurance available to homeowners includes: Flood, earthquake and crime insurance. Also, so-called umbrella policies offer liability coverage that would kick in over and above the liability provided by your basic homeowner policy.
*Deductible. Go with the highest reasonable deductible you can afford. (With a $100 deductible, if you suffer a $500 loss, the company would pay you $400 and you would absorb the other $100.) The higher the deductible on your policy, the lower the premium.
"One of the reasons we recommend high deductibles," says NICO president Robert Hunter, "is you do much better saving money in a side fund -- in a bank account, for example -- and handling the small losses yourself." You will thus reduce the chances of your policy being terminated.
*Rates. Shop around for the best rates on the coverage you prefer. Ask friends and relatives how they feel about their insurance companies. What sort of rates do they charge? How are they about settling claims?
*Agents. Talk to more than one agent. Reminds one insurance executive: "Ideally you're establishing a business relationship that will last 20 to 25 years. Sit down and talk with the agent the same way you would with any other professional. Ask for references. Ask about their professional credentials." A good agent should keep you up on developments in the industry, upcoming rate changes, improvements in coverage, new coverage options.
If you do have a problem with your insurance company, your agent may just be the one to successfully go to bat for you, although some companies say you're better off taking an appeal directly to the company.
NICO's Hunter says you have several options. "The companies will overrule themselves on occasion. You have a line of administrative appeal: You always can appeal to your agent, you can appeal to somebody in authority in the company, and you can appeal to your state insurance department.
"If you feel that something terribly abusive has happened, you can go to court."
If your insurance policy is terminated and you're unsuccessful in appealing for its reinstatement, the company may offer to write a policy with a higher deductible level. If not, it sometimes is possible to find a company willing to provide a homeowner policy but with reduced coverage at higher rates.
Your final alternative may be applying for coverage under the so-called FAIR (Fair Access to Insurance Requirements) plan. "They write you," says Hunter, "if you can't get insurance in the normal market. It's like assigned-risk plans for auto insurance."
The problem, he acknowledges, is that you only can get fire coverage. "You can't get a regular homeowner's package, and in some cases the rate is higher. It's sort of a second-class status."