But few homeowners today are feeling very secure about their insurance as millions are being hit with increased premiums, lower coverage, denied claims and canceled policies.

The situation is being called a homeowner's insurance crisis in some areas, with major providers like State Farm Insurance no longer writing new policies in states including Texas, California and Louisiana.

A Consumer Federation of America survey found that, nationwide, homeowners' insurance rates increased by more than 13 percent in 2002 and seven percent in 2001.

In many states, however, the increases were much higher: In Iowa, rates rose 33 percent, in Texas, 57 percent. In Florida, State Farm recently won approval to raise rates by 42.5 percent.

There are several factors contributing to this "crisis": investment income has been falling at insurance companies, the costs of certain claims like mold have doubled since 1997, the costs of repairs have increased and home values have increased — all increasing the risk insurance companies are taking on.

Also, up until recently, homeowners' insurance was typically offered as a loss leader to get at the more lucrative auto insurance business from customers. Now that major providers, such as GEICO and Progressive Insurance, have aggressively gathered market share in auto-product lines, many companies are left with a large portfolio of home policies where they were paying out millions more in claims than they were collecting in premiums.

Nationwide, insurance companies paid out $6 billion more in claims and expenses in 2002 than they collected in premiums.

The new reality in the homeowner insurance industry is that insurers are charging higher premiums and imposing tougher underwriting standards on the coverage they provide to homeowners, which includes canceling coverage for habitual claims filers and terminating coverage based on the past claims history of a particular property.

Insurance companies long have charged more for life insurance coverage for smokers and for auto insurance for those with more driving indiscretions. Now, homeowners need to think twice about making a claim for a loss on their homeowners' insurance much as they do for claims on their auto insurance.

Here is what you need to know to deal with this situation:

• Don't file small claims: Why pay for the coverage if you are not going to use it? According to insurance-industry analysis, if you have a loss in the last three years, you are 25 percent more likely to have a loss in the next 12 months. This likelihood increases to 75 percent if there are two losses in one year. Think twice before filing small claims for things like lost luggage or other personal property items because you may need to claim a more substantial loss later. Even claims filed but not paid are still recorded as a claim and loss. Several claims over a short period may trigger your insurance company to view you as a habitual claims filer and lead to cancellation.

• Assume more risk: Raising your deductible from $250 to $1,000 or even $2,500 can save you over 20 percent on your premium. This will also reduce the risk your insurance provider is taking on and you will also be less tempted to inquire about or file smaller claims.

• Get a CLUE report: The Comprehensive Loss Underwriting Exchange, or CLUE, is a database monitored by ChoicePoint Inc. that includes over 40 million claims over the past five years. CLUE provides the most widely used records of past claims and loss reports for insured property and is used by 90 percent of the homeowners' insurance market. Homeowners can obtain a CLUE report for their insured property from Choicetrust.com www.choicetrust.com for a fee of $12.95 (if you have been denied coverage it's free). Homeowners selling their property should get a copy to make sure there are no errors or inquiries that create the "tainted house" scenario. Homebuyers are now advised to request the CLUE report from the seller or their real estate agent before they make an offer on the property.

• Inquire carefully: The mere inquiry about how a claim would be handled can become a problem for an unwary homeowner. In certain states, calling your insurance company to inquire about a potential claim can be added to a loss report for the property.

• Maintain before repairs: Losses due to water damage are of particular concern to insurers because they are expensive to repair and can create other losses such as mold infestation. Some insurance providers have reported that while the number of water-damage related clams has risen only slightly since 1997, the cost of repairs has more than doubled. Inspect all household fixtures that connect to a water source for leaks, such as toilets, dishwashers, clothes washers and refrigerators. Inspect for signs of seepage and replace older seals and hoses before they become a problem.