Homeowners and renters insurance can vary significantly in coverage, as well as in price. It is not only price that should guide you in your decision. Pay attention to things like quality of service and financial strength of the insurance company.

Here are some things you should know and consider when choosing a homeowners insurance plan:

• What should I know in order to decide how much insurance I may need?
  
  • Cost of replacing your home today. Ask an appraiser, builder or your insurance agent for an estimate. If you make drastic improvements to your home, such as remodeling or building a deck, you should update your appraisal and coverage to compensate for the increased value.
  • Protection for inflation. Many companies automatically adjust your premiums upward to cover the rising cost of replacement. Otherwise, you should review your policy once a year to see if you still have adequate coverage.
  • Planned additions or renovations. Adding a family room or renovating a basement will increase the value of your home and the amount of coverage needed.
  • Covering the value of your personal property in full. If you have many valuable possessions or have recently acquired new belongings such as stereos, televisions, computers, cameras and musical instruments, you may need to pay for increased coverage. Ask your insurance agent if you are covered for specific items of value. If not, consider purchasing extended coverage to protect jewelry, furs, silver and the like.
  • Need for any optional coverage. Some losses are specifically excluded in all policies, such as those resulting from floods and earthquakes. If these are a danger in your area, you may want to obtain additional or separate coverage.
  • Inventory of your personal belongings. Complete a room-by-room inventory listing the approximate value of your possessions. Keep the completed list in a safe place outside your home, such as in a safe-deposit box or at your office. Photograph or videotape each room, if possible, and keep this visual record with your inventory.
  
  
• How can I lower my home insurance expenses?
  
  • Ask for quotes from at least three insurance companies.
  • Raise your deductible. Your deductible is the portion of each loss you pay before your insurance company will begin paying for your covered loss. The higher your deductible, the lower your insurance premiums. In determining a deductible, you must decide how much you can afford to pay up front in the event of an unexpected loss.
  • Reduce the risk of theft. Consider installing a burglar alarm or at least dead bolt locks on all outside doors. Communities with Neighborhood Watch programs often have lower insurance rates. Check with your local police department for information on how you can get involved.
  • Ask about discounts for safety features such as an automatic sprinkler system, central burglar or fire alarm, dead bolt locks, smoke detectors or fire extinguishers.
  • Ask about discounts for buying other policies - auto and boat, for example - with the same company.
  • Ask what other discounts are available. For example, if you are at least 55 years old and retired, you may qualify for lower rates.
  • Look into discounts available if you stay with the same insurer for several years.
  • Insure your house, not the land. It is your home, not your land that is at risk from the perils covered in your policy. So when deciding how much insurance to buy, don't figure in the value of the land.
  • Ask if you are eligible for group coverage, which is sometimes available through alumni associations, employers and business associations.