Your home is one of the biggest purchases you'll ever make, so protecting it with home insurance just makes sense. But how much coverage do you need, what will it cost you, and what's the easiest way to find an affordable policy?

Most insurers suggest you insure your home for 100% of its replacement value—enough insurance to cover the cost of rebuilding your house, excluding the land.

This is not the amount you paid for the house, because the present cost of rebuilding it may be more (or even less) than you paid.

It is not the market value of your house, i.e. how much you could sell it for, which may depend upon its area or location. It is simply the cost of rebuilding your house at current construction costs.

Your belongings can also be insured with your home. This is mostly furniture, but also jewelry (up to a certain value), electronic equipment, furs, paintings, etc.

Most homeowner’s policies consider the cost of your contents to be approximately 50% of the amount of insurance you have on the house itself. If you think this is less than enough or too much, you might want to do an inventory of your furniture and personal possessions, listing all the furniture and items you want covered (it’s even better to also take pictures of the contents).

What does home insurance cost?

There are a great deal of factors that determine how much you will pay for homeowners insurance. Some of the factors you may have control over, others- you may not. However, it is always a good idea to be aware of what affects your rate and how you may be able to improve it.

There are several ways you can lower your potential home owners insurance premiums. They include the following:

1. Be sure to shop around. It'll take a few phone calls, but they could save you a good sum of money. Ask your friends, check the yellow pages or call your state insurance department. Also check consumer guides, insurance agents and companies

2. Raise your deductible. Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay according to the terms of your policy.

3. Buy your home and auto policies from the same insurer.  Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.

4. When you buy a home... Consider how much insuring it will cost. Because a new home's electrical, heating and plumbing systems and overall structure are likely to be in better shape than those of an older house, insurers may offer you a discount of 8 to 15 percent if your house is new.

5. Insure your house, not the land. The land under your house isn't at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don't include its value in deciding how much homeowners insurance to buy. If you do, you'll pay a higher premium than you should.

6. Beef up your home security. You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm, or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police station or other monitoring facility.

7.  Stop smoking. Smoking accounts for more than 23,000 residential fires a year. That´s why some insurers offer to reduce premiums if all the residents in a house don´t smoke.

8. Once you retire... Retired people stay at home more and spot fires sooner than working people. Retired people have more time for maintaining their homes, too. If you´re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies.

9. See if you can get group coverage. Alumni and business associations often work out an insurance package with an insurance company, which includes a discount for association members. Ask your association´s director if an insurer is offering a discount on homeowners insurance to you and your fellow graduates or colleagues.

10. Stay loyal to your insurer. If you´ve kept your coverage with a company for several years, you may receive special consideration. Several insurers will reduce their premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more.

For more information please visit www.puenteinsurance.com