For many of us our home is our most valuable possession. The time to think about the unthinkable disaster is before it happens to you. If your home were damaged or destroyed, insurance can help you repair or rebuild your home and replace damaged possessions.

The main purpose of insurance is to protect you against losses you cannot afford. Few people have the financial resources to rebuild their homes. In addition to protecting your home and possessions, homeowners insurance also provides liability coverage to protect you from financial ruin if someone is injured on your property and sues for damages

 A homeowners insurance policy consists of coverage for your dwelling and your personal property. It also includes liability insurance which pays for injuries to other people or damages to their property accidentally caused by you, your family or your pets. You also can buy several types of additional insurance for property that is not listed in your homeowners policy or for perils not covered ? such as flood ? for which you need a separate policy.

 You do this by either buying a separate policy or by adding an endorsement or rider to your policy.

Tips for Keeping Your Rates Low

There are some simple steps you can take to reduce your homeowner's premiums.

     •Raise Your Deductible - A deductible is the amount you pay before the insurance starts to pay for your loss. Since the purpose of insurance is to pay for the losses you cannot afford, raise your deductible to a limit that you could handle in case of a loss.

     •New Home - If your home is less than 10 years old, you may be eligible for a new home discount. •Make Your Home Safer - You may be eligible for a discount if you have a burglar and fire alarms systems and/or sprinkler systems. Monitored systems will earn a bigger discount than unmonitored systems.

Construction Material - When you buy a home, look for fire-resistant construction, such as brick, masonry or rock. You may pay a lower premium for hail-resistant roofs, such as those made of concrete tile, while wood roofs may bring a surcharge. Check the location of the nearest fire department, and avoid buying in flood prone areas.

Factors that Affect Your Premium

Companies may use a number of criteria to establish your individual premium. These include:

The age and condition of your home. Older homes and homes in poor condition generally are more expensive to insure. In addition, companies may refuse to insure homes in poor condition. However, they can´t deny coverage solely because of a home's age or value.

Your home's replacement cost. Since your policy will pay to rebuild your home if it is destroyed by a covered loss, premiums are more expensive for homes with a high replacement cost.

The construction materials used in your home. Homes built primarily of brick are less expensive to insure than frame homes.

Where you live. Premiums will likely be higher for homes in areas with a high frequency of storms, such as tornados or hailstorms, or with a high incidence of theft.

Availability of local fire protection. Homes with access to good fire protection services get better rates. If you live in an area with limited fire protection, your rates will be higher.

Your claims history. Companies will charge more if you've filed claims in the past. Before filing a claim, its a good idea to ask your agent or the company's underwriting department how it will affect your premium at renewal time. For less expensive losses, it may be cheaper in the long run to pay for repairs yourself rather than file a claim. This is especially true for repairs that wouldn't cost much more than the amount of your deductible.

Your credit score. Companies may consider your credit score when deciding whether to sell you a policy and what to charge you. However, a company cannot refuse to sell you a policy or cancel or nonrenew your policy solely on the basis of your credit. Companies that use credit scoring must file their models with the Texas Department of Insurance. Companies must file their underwriting guidelines with the Texas Department of Insurance and update them each time they make a change.

Discounts can help you save money on your insurance. Companies may offer premium discounts if you take steps to reduce the chances of a loss. Each company sets the amount of the discounts if offers to its policyholders. Some of the more common discounts are listed below: Impact-resistant roofs Noncombustible roof Marking personal property with an identifying number (inspection required) Age of house (companies set own standards) Premises in good condition (companies set own standards) Good claims experience for three consecutive years Other policies with same company or group House insured to full replacement cost Senior citizens discount Home security devices: Burglar, fire, and smoke alarm systems Automatic sprinkler systems Fire extinguishers