Home Insurance Basics What every homeowner needs to know about protecting their house and belongings.

Homeowners insurance protects four basic things: your home, your belongings, your liability, and expenses from not being able to live in your home if it's damaged. Because of the multi-faceted nature of the policy, it gets confusing figuring out what it covered and for how much. Nearly everything in a home is covered, but only if it is lost or damaged in certain ways. For example, most policies don't cover flood damage, but do protect against fire.

One of the most important things to consider is whether or not you need additional floaters or riders to boost coverage on items like electronics or jewelry. Typical policies cover these items, but only up to $1,000 or so. Happily, these items are covered anywhere in the world, so if they're stolen from you at work or on vacation, they will still be replaced. Your possessions are also covered if your vehicle is broken into and some of them are taken.

Before selecting a policy, the best thing to do is catalogue your possessions (see are article on taking a home inventory ) in a way that allows you and your agent to go over them and find a plan that works.

It can be difficult to decide where to cut corners. Because insurers often drop clients that file multiple claims in a short amount of time, choosing a high deductible is a good option. Skimping on structural or liability coverage is ill-advised because in a total loss situation or the case of an expensive lawsuit, a watered-down policy won't completely protect you.

Every policy has the same basic set of things that are covered and things that aren't, but policies are highly nuanced. To optimize what you pay and what's protected, talk to three or four qualified agents. The perfect policy is out there, it just might take some digging.