As important as it may be to obtain adequate coverage for ones home and personal property, it is equally important for most people to find a policy they can afford. For this reason, those new to Texas, who are looking to buy homeowners insurance for their new purchase, would do well to research the various factors that come into play when insurance companies calculate your premium. It is also a good idea to learn about the types of discounts that may apply to homeowners in the state of Texas. Finally, there are a few basic guidelines one should follow when shopping for homeowners insurance in the state of Texas, which will make the odds of finding a good, affordable policy all the more likely.

The following are some of the most common factors that insurance companies take into account when calculating Texas homeowners' premiums:

Age/condition of home. Older homes, or homes that are in a state of disrepair, will clearly be more expensive to insure due to the insuring company's perception that these types of homes are more likely to become an immediate liability. While a company may refuse coverage for a home in very poor condition, an insurance company cannot deny coverage solely on the basis of age or value.

Your home's replacement cost. Due to various local conditions which may have changed since the time your home was initially built, there are cases in which the replacement cost of a home is significantly greater than the value of the home itself. Premiums for homes with a high replacement cost will certainly be higher as a result of this fact.

The construction materials used in your home. The better the materials used to construct your home, the lower your rates are likely to be. For example, brick homes are generally less expensive to insure than frame homes. Typically speaking, if insurance companies perceive that your home is constructed of durable, long-lasting material, this will be taken into account when calculating your premium.

Where you live is also important. If you are moving to a high-storm area, such as the Gulf Coast, you can expect to pay more due to the frequency of hurricanes and other high-wind storms in the area. Similarly, other areas with a high incidence of natural or manmade disaster (such as crime) will be vulnerable to high homeowners insurance premiums.

Availability of local fire protection. Conventional wisdom recommends living as close to a fire station as possible. It is, in fact, true that homes that are in close proximity to a fire station are likely to receive lower homeowners insurance rates than areas with lower fire protection.

Your claims history. As is the case with all types of insurance, your personal claims history will be taken into account when calculating your premium. It may actually be a good idea to talk to an agent before filing a claim, to see how it will affect your premium. In some cases it is cheaper to make repairs yourself, rather than pay the higher rates that will result from filing the claim.

Your credit score. Companies may consider your credit score when deciding whether to sell you a policy and what to charge you. However, a company cannot refuse to sell you a policy or cancel or refuse to renew your policy solely on the basis of your credit. Companies that use credit scoring must file their information with TDI.

As important as it may be to obtain adequate coverage for ones home and personal property, it is equally important for most people to find a policy they can afford. For this reason, those new to Texas, who are looking to buy homeowners insurance for their new purchase, would do well to research the various factors that come into play when insurance companies calculate your premium. It is also a good idea to learn about the types of discounts that may apply to homeowners in the state of Texas. Finally, there are a few basic guidelines one should follow when shopping for homeowners insurance in the state of Texas, which will make the odds of finding a good, affordable policy all the more likely.

Discounts available to Texas Home Owners:

Discounts can help you save money on your insurance. Companies may offer premium discounts if you take steps to reduce the chances of a loss. Each company sets the amount of the discounts if offers to its policyholders. Some of the more common discounts are listed below:

* Impact-resistant roofs

* Noncombustible roof

* Marking personal property with an identifying number (inspection required)

* Age of house (companies set own standards)

* Premises in good condition (companies set own standards)

* Good claims experience for three consecutive years

* Other policies with same company or group

* House insured to full replacement cost

* Senior citizens discount

* Burglar, fire, and smoke alarm systems

* Automatic sprinkler systems

* Fire extinguishers

* Home security devices

Shopping for Homeowners Insurance:

Rates vary widely among companies, so it pays to shop around. Following are some useful tips to help you find the best deal for your money:

* Decide before shopping the specific coverages and coverage amounts you need.

* Choose the highest deductible you can afford. Your deductible is the amount you must pay yourself before the insurance company will pay. Higher deductibles will lower your premium, but remember that you'll have to pay more out of your own pocket if you have a claim.

* Because rates vary, ask several companies and agents for price quotes. When comparing rates, make sure they are for the same coverages. TDI publishes a homeowners rate guide that can help you shop. The rate guide lists companies and their annual premiums for policies with $100,000 coverage on the house, $40,000 on its contents, and a 1 percent ($1,000) deductible.

* When getting a price quote or applying for insurance, answer questions truthfully. Wrong information could cause you to get an incorrect price quote or could lead to a denial or cancellation of coverage.

Consider factors other than price, including a company's financial rating and its complaint index. Financial ratings indicate a company's financial strength and stability, while the complaint index indicates a company's customer service record. Buy only from licensed companies and agents. You can find out whether a company or agent is licensed and learn a company's financial rating from an independent rating organization and its complaint index calling TDI's Consumer Help Line or by visiting the TDI website.