Most people work with the insurance company or agent that takes care of their car insurance or their existing home insurance as they begin a search for a new home. Realtors or others involved in the transaction are a good resource and can match clients up with an insurance agent if they don't already have one.

"Although we usually do not get involved in the insurance part of the transaction, it is a requirement of the lenders to have insurance to cover the loan or replacement cost of the home," said Judy Hamilton, a mortgage planner with Bankers Network.

Hamilton finds that whether to acquire earthquake insurance is often a topic of conversation and flood insurance can also be an issue if the property is in a flood zone.

"The insurance coverage is expensive and sometimes can be a concern with potential buyers," she said. "Since earthquake insurance is not required by lenders, our clients ask us what we think. I normally remind my clients that we do live in earthquake country and that I do have it on my personal residence. It comes down to being a personal choice."

Realtor Dan Turkus of Turkus Real Estate tries to channel his clients away from flood zones, but recommends flood insurance if they choose a home in a high-risk area.

"Eventually they may want to resell that home and the fewer negatives, the easier and faster the next sale will occur. It is the same with buying on a busy street. If they insist, I make sure they have flood insurance and will also recommend to all my clients they get full replacement riders," Turkus said.

Realtor Erin Benford of Windermere Silicon Valley Properties in Los Gatos says insurance is important, though sometimes it seems clients view it as a minor detail when they are looking for a house.

"We must have the insurance for the lender and we need to have the price for an accurate buyer's total cost estimate. The quote will tell us whether the new house is in a flood zone. We factor the price of the extra insurance into our total house cost. This is a reality check, though I haven't found anyone to date who thought the insurance cost was a deal breaker."

Once the home is purchased, the Insurance Information Institute recommends homeowners keep their insurance updated regularly to include any improvements, major purchases or rebuilding costs.

"Hurricane Katrina and other recent disasters are a reminder that homeowners should contact their insurance agent or company representative at least once a year to make sure that their insurance is up to date," says Jeanne M. Salvatore, Insurance Information Institute senior vice president of public affairs. "A major alteration or addition to your home or lifestyle change such as a marriage or an elderly parent moving in with family heirlooms should also trigger a call to your insurance company."

According to the U.S. Census Bureau, homeowners spent more than $11.8 billion on additions, $82.3 billion on alterations and $28 billion on maintenance and repairs in 2004.

"Over the last several years, homeowners have taken advantage of record low interest rates to upgrade their kitchens and bathrooms, and add rooms to their homes," Salvatore said. "If these improvements are not properly insured, homeowners can find themselves underinsured in the event of a fire, hurricane or other major disaster."

The institute suggests that homeowners meet annually with their agent or company representatives to ask three key questions: Do I have enough insurance to rebuild my home? Do I have enough insurance to replace all of my possessions? Do I have enough insurance to protect my assets?

The policy needs to cover the cost of rebuilding a home at current construction costs. Some homeowners simply purchase enough insurance protection to satisfy their mortgage lender, while others confuse the real-estate value of their home with what it would cost to rebuild it. The replacement cost should be based on what it would cost to rebuild if the home was destroyed.

There are several considerations and policies that are available that should be discussed with an insurance agent, including replacement cost, guaranteed or extended replacement costs, inflation guard and building code upgrades.

While standard policies provide coverage for disasters such as fire, lightning, hurricanes and winter-related damage such as burst pipes, they do not include coverage for earthquake or flood, including flooding from a hurricane. The Insurance Information Institute recommends contacting a local agent or company representative about purchasing flood and/or earthquake coverage.

Most homeowners' insurance policies provide coverage for personal possessions for approximately 50 percent to 70 percent of the amount of insurance on the structure of their home. The best way to determine if this is enough coverage is to conduct a home inventory. The Insurance Information Institute has free home inventory software available for download at www.knowyourstuff.org.

It's also a good idea to consult with an agent or company representative to determine whether to insure possessions by their actual cash value or by their replacement cost.

Sometimes standard homeowners policies, even with additional coverage, may not be sufficient to fully protect a homeowner's assets. Most homeowners' insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available.

The Insurance Information Institute says it is important to purchase enough liability insurance to protect assets. If the standard liability coverage for a homeowners policy is not sufficient, an excess liability or umbrella policy is an option that would provide additional coverage over and above what is covered in the home (and auto) insurance policy.

For more information about how to properly insure a home, visit the Insurance Information Institute's website at www.iii.org.