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Out of sight, out of mind.

Homeowner insurance policies are often shoved in desk drawers and forgotten. Folks preoccupied with other matters overlook the fact that they provide an important financial safety net for a family's hopes and dreams.Always shop around to avoid paying too much, yet be sure to get the coverage you need from a respected firm you can count on. Update coverage at least every two years, taking into account home improvements, additional possessions or appliances.

Just ask any homeowner whose insurer wouldn't pay after disaster struck.

"You must check out a company with state regulators beforehand to make sure it's good at paying its claims," warned Victor Navarroli, who didn't receive reimbursement from his insurer when a house he owned in Hinsdale, Ill., suffered $80,000 in damage three years ago in a fire. "Some less scrupulous insurers use the `starving' technique, in which they drag things out in hopes you'll ultimately have to agree to perhaps 25 cents on the dollar."

Go to your local library to consult Best Insurance Reports, which ranks insurers based on solvency. Stick with companies rated A or A+. The largest homeowner insurance writers are State Farm, Allstate, Farmers, USAA, Nationwide, Chubb, Prudential, Aetna, Safeco and ITT Hartford.

"People don't shop around enough, and the lowest-priced company's coverage is often less than half the cost of the highest-priced company," observed J. Robert Hunter, president of the non-profit National Insurance Consumer Organization, who recommends consulting not only insurers and their agents but also independent agents carrying several lines and direct-sale companies that charge less because they don't employ agents.

Homeowner insurance covers your structure and possessions, except for damage from floods or earthquakes.

"The consumer should know what he wants, needs and expects from a policy, actually picturing an event happening," said Ross Buchmueller, national sales manager for Chubb Insurance Co. "For example, if your home burned down, some policies only pay out if you rebuild on the same spot."

Market value insurance covers the amount you choose to insure your house based on its market value, usually at the 80 percent required by lenders. Replacement insurance guarantees the value of the home at that moment, which could be more than market value depending on the house's features. There's a recent trend toward more costly guaranteed replacement cost insurance, which guarantees to rebuild your house no matter what the cost and has a rider to factor in inflation.

Be honest in what you tell your agent, and know what you're insuring. "Homeowners often aren't aware of the personal property in their house and don't keep an inventory," said Steve Goldstein, vice president with the industry's Insurance Information Institute.

Smart ways to cut home insurance costs, according to the institute, are to:

- Raise your deductible. By raising your deductible, the amount you pay toward a loss before the insurance company pays, from $250 to $1,000, you may be able to cut your yearly premium by 25 percent.

- Buy home and car policies from the same insurer. It may take 5 percent to 15 percent off your premium for multiple policies. Some insurers reduce premiums by 5 percent if you stay with them three to five years and even more after six years.

- Think about what kind of home you buy. You may receive a discount of 8 percent to 15 percent on a new house vs. an older house whose systems and structure aren't in as good shape. In addition, the closer your home is to firefighters and their equipment, the lower your premium.

- Include only your house and not the land it's on when obtaining insurance.

- Beef up home security. You can get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks.

- See if you can get group coverage through your employer, alumni association or business association. Also seek out senior discounts of up to 10 percent.