There are four main considerations you need to take into account when picking your home insurance company. All are important:

1. Price.
   Many home insurance companies sell insurance policies and home insurance quotes and prices vary greatly from one to another, so it really pays to shop around. Get at least three home insurance quotes from companies, agents and from the Internet. Your state insurance department may publish a guide that shows what insurers charge for different policies in various parts of your state.
   

2. Insurer stability.
   Make sure that the company you buy from is financially stable so you know they will be around to pay any home insurance claims. 
   
   The following companies rate home insurance company strength:

   • A.M. Best Company, Inc.
     Ambest Rd. 
     Oldwick, NJ 08858
     908-439-2200
     http://www.ambest.com
     
     
   • Fitch Ibca Inc.
     1 State Street
     New York, NY 10004
     212-687-1507
     http://www.fitchibca.com
     
     
   • Moody’s Investor Services
     99 Church Street
     New York, NY 10007
     212-553-0300
     http://www.moodys.com
     
     
   • Standard & Poor’s Insurance Ratings Services
     55 Water Street
     New York, NY 10004
     212-438-2000
     http://www.standardandpoor.com
     
     
   • Weiss Research
     4176 Burns Road
     Palm Beach Gardens, FL 33410
     800-289-9222
     http://www.weissratings.com
     
     
     

3. Service.
   Your home insurance company and its representatives should answer your questions and handle your claims fairly, efficiently and quickly. You can get a feel for this by talking to other customers who have used a particular home insurance company or agent. You can also check with your state insurance department to see if it makes public a complaint ratio, which compares the number of valid complaints with the company's share of policies in your state.
   

4. Comfort.
   You should feel comfortable with your home insurance quote and home insurance purchase, whether you buy it from a local agent, directly from the home insurance company over the phone, or over the Internet. Make sure that the agent or company will be easy to reach if you have a question or need to file a claim.

Source: Insurance Information Institute, Inc. www.iii.org

How can I save money on home insurance?

The price you pay for your home insurance can vary by hundreds of dollars, depending on the size of your house and the home insurance company you buy your policy from. Here are some ways to save money.

1. Shop around.

Home insurance quotes and prices vary from company to company, so it pays to shop around. Get at least three home insurance quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.

You buy home insurance to protect you financially and provide peace of mind. It's important to pick a home insurance company that is financially stable. Check the financial health of home insurance companies with rating companies such as A.M. Best ( http://www.ambest.com ) and Standard & Poor’s ( http://www.standardandpoors.com/ratings ) and consult consumer magazines.

Get home insurance quotes from different types of home insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several home insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet.

But don't shop the home insurance quote alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they make available consumer complaint ratios by company.

Select an agent or company representative that takes the time to answer your questions. Remember, you'll be dealing with this company if you have a home insurance claim or other emergency.

2. Raise your home insurance deductible.

A deductible is the amount of money you have to pay toward a loss before your home insurance company starts to pay a claim. The higher your deductible, the more money you save on your premium. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25%.

If you live in a disaster-prone area, your insurance policy may have a separate home insurance deductible for damage from major disasters. If you live near the coast in the East, you may have a separate windstorm home insurance deductible, if you live in a state vulnerable to hail storms, you may have a separate home insurance deductible for hail, and if you live in an earthquake-prone area, your earthquake policy has a home insurance deductible.

3. Buy your home insurance and auto insurance policies from the same insurer.

Most companies that sell home insurance also sell auto and umbrella liability insurance. (An umbrella liability policy will give you extra liability coverage.) Some home insurance companies will reduce your premium by 5% to 15% if you buy two or more insurance policies from them. But make certain this combined price is lower than buying coverages from different companies.

4. Make your home more disaster-resistant.

Find out from your home insurance agent or company representative what you can do to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters and shatter-proof glass, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing and electrical systems to reduce the risk of fire and water damage.

5. Don't confuse what you paid for your house with rebuilding costs.

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 home insurance to buy. If you do, you could receive a higher home insurance quote and you'll pay a higher premium than you should.

6. Ask about discounts for home security devices.

You can usually get home insurance quote discounts of at least 5% for a smoke detector, burglar alarm or dead-bolt locks. Some companies may cut your premiums by as much as 15% or 20% if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren't cheap and not every system qualifies for a discount. Before you buy one, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums.