Six Steps to Protect Your Home

Wherever you live, it pays to take steps to protect your home from storms and maintain your homeowners coverage.

1. Keep your record clean. Raise your deductible to at least $1,000, which lowers your premiums and eliminates the temptation to file small claims that could prompt insurers to drop you.

Insurers share information about your claims history through the Comprehensive Loss Underwriting Exchange (CLUE), so having a clean record could help you get coverage elsewhere if you need to find a new insurer. Order a copy of your CLUE report at www.choicetrust.com.

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2. Don't take no for an answer. If an insurer tries to drop you, ask what you can do to keep your coverage -- such as increasing your deductible, making home improvements (storm-resistant windows, for example) or switching your auto insurance to the same insurer.

3. Consult an expert. Independent insurance agents know the marketplace and the best strategies for finding an insurer to cover you. And they know each company's reputation for customer service and financial stability, which can make a big difference if you file a claim. Find an independent agent in your area.

4. Buy enough coverage. Trey Hutt, an independent agent in Panama City, Fla., says that when rates are on the rise, one of his biggest challenges is to persuade customers to increase their coverage to keep up with rising building costs. Marshall Swift/Boekh, which provides rebuilding costs for insurers, estimates that 59% of U.S. homes are underinsured, by an average of 22%.

Regardless of whether you live in a hurricane-prone area, let your insurer know if you've made home improvements. Boosting your coverage may not increase your premiums nearly as much as you'd expect.

5. Don't forget flood insurance. Flooding isn't covered under your homeowners policy, but coverage can be cheap if you aren't in a flood zone. Don't wait until the last minute; there's a 30-day waiting period before the insurance takes effect. Flood coverage is available through the National Flood Insurance Program (see www.floodsmart.gov for price quotes).

If you live in a low-risk area, maximum coverage of $250,000 will cost you less than $350 per year. That's how much it cost insurance agent Don Beery to renew the coverage on his New Orleans home. "I paid that bill in a hurry," says Beery.

Chubb has begun offering its own flood policies for its homeowners-insurance customers. The Chubb policies cost more, but provide higher limits and additional coverage.

6. Beef up your emergency fund. More insurers are moving toward percentage deductibles, especially for windstorm damage. So you might have to pay 2% to 5% of your home's insured value -- that's $6,000 to $15,000 on a $300,000 home.

Other common storm-related expenses -- such as removing fallen trees, which can cost thousands of dollars -- generally aren't covered unless the tree lands on your house. Before hurricane season, set aside several thousand dollars in a money-market account to cover potential out-of-pocket costs (see our yields and rates page for the best money-market rates). If you have a cash kitty, says Hutt, you can get a jump on hiring repair crews and be reimbursed by your insurer later.

Editor's Note: This story has been updated since it originally was published in 2006.

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.