Home insurance, like car or health insurance, is one of the fundamental necessities of life--especially to homeowners. Not only that, but those with a mortgage under their belt have to carry it. Lenders want their property protected. So do you, though. Let's look at some of the essentials of home insurance.

Homeowners Insurance: Do Your Homework

Regardless of the advertisements on insurance that try to comfort and make you feel all warm and fuzzy inside, to an insurance company--you and your home are simply risk-based statistics. Your premiums include factors like your general lifestyle, your occupation, the type and value of the home, and other information.

Get a good estimate, via your home's contractor or another one, of what it would cost to replace your home. Get more coverage than it's worth and you'll pay too much. Get less coverage than needed, then you put the house and, possibly, your family at risk. And while a super-low premium is good, do a little homework on the insurer before contracting with them. The basic question should be will this company likely respond quickly and efficiently in the event of fire, burglary, etc.? Check it via consumer reviews and the BBB.

What it Covers, and What it Doesn't

Ascertain exactly what you are getting with your insurance policy (including any optional coverage) and what you're not. Generally, home insurance covers your home for the full amount you've specified--against most elements. Usually excluded, however, are earthquakes, war, floods, and nuclear accidents (intentional or not). Of those, flood insurance is strongly recommended--especially for homes built in low-lying areas or even some sitting a bit higher. Because flooding is a risk that most insurers won't even touch, taking out flood insurance with FEMA, for instance, is very wise.

Your Home's Content

Again, make sure you know exactly what's covered. As far as the interior's content, most insurance policies does protect it--but usually within certain limits. As a rule of thumb, insurers cover contents up to around 70-75% of the home's value. Need more? Take out more. Premiums will be higher, but should anything happen to your valuables, you'll likely shell-out far less in deductibles.

Also important is making a record of everything in your home that has value--such as a LCD TV, fridge, bed, furniture, and so forth. If something happens--then you'll have detailed records to fall back on.

Save Wherever Possible

See which discounts may apply. All too often, people neglect to find ways to save on premiums--and insurers usually won't go over-and-beyond to get the consumer every last discount. Some offer significant discounts if you have an emergency service-linked alarm system that notifies police or firefighters if needed. Some offer discounts for good drivers, while others offer discounts reward those who have a proven tract record for being responsible.