Homeowner insurance is a must, of course, if you own your home. All homeowners realize that, but it's not always easy to determine the right dollar amount of homeowner insurance you should have for adequate protection.

Homeowner Insurance is designed to offer you the financial wherewithal to rebuild if you're faced with natural or other disaster such as fire, flood, hurricane, tornado, earthquake or terrorism. Unfortunately all too often homeowner policyholders realize far too late that they haven't adequate homeowner insurance coverage to help them get back to their customary way of life.

If you have homeowner insurance, renters insurance, or insurance on your condominium that doesn't necessarily mean that you're fully protected from any unforeseen disaster or tragedy. Though the percentage varies by study, third party research reports have determined that between half and three fourths of homeowners in the U.S. have underinsured their primary residence.

You should periodically meet with your homeowner insurance agent and review your homeowner policy, taking into consideration the current replacement value of your home and the goods and property covered under your policy. Since you first purchased your homeowner insurance, your requirements for coverage might have changed, the value of your home most probably has increased in value, or you might have made significant purchases and improvements that now need to be added to your homeowner coverage.

Your homeowner insurance policy does add a small annual inflation cost to the policy which, all things being the same, would be adequate. If, however, you've remodeled, reheated, added on a deck , patio or pool, or refinished your attic or basement, your house will have realized a significant value increase. You'll almost certainly need a new assessment so that should a disaster occur you can replace what you've lost.

Should disaster such as tornado, floor or fire befall your home, your homeowner policy could have a ceiling on the dollar figure they will reimburse you. A homeowner general casualty policy, for example, that is endorsed to replace the cost of the building, the insurance carrier is pledged to pay up to 125 percent of the home's valuation. If, in this example, the house is insured at $200,000, the homeowner policy will reimburse the homeowner $250,000. If you've underinsured your home you may end up holding the bag for the remainder of the replacement costs.

If your home is a costly upscale property you may want to think about a homeowner policy feature that guarantees coverage up to home replacement value. Many insurance firms offer this upscale homeowner policy feature.

Consider too that while your home may not have increased in value beyond the automatically inflated homeowner policy valuation your possessions may well have done so. You may have added expensive electronics or furs, or may have high value personal items whose value increases with age, such as jewelry, and coin or stamp collections.

One important money saving factor in the cost of your homeowner policy is that most insurance carriers give 2 to 15 percent discounts on homeowner safety and security equipment and products such as dead bolts, grates on windows, and smoke or burglar alarms. Securing your home, however, must take personal safety into consideration. What you don't want to do is develop such a homeowner fortress that you cannot escape in the event of a fire or another in-home emergency.

Burglars are most likely to avoid your home however, if you light it up, if breaking into your home is time consuming or noisy. In fact, homeowner research has proven that burglars do not attempt to break into houses that would take them more than five minutes to enter.