In fact, almost 2.5 million households -- half of them in the South -- lost their homeowners coverage in the last two years, though most were able to find other policies, according to a report this week from the Independent Insurance Agents & Brokers of America. About 51 million U.S. households experienced a rate increase.

        But consumers can reduce their risk of price hikes and nonrenewal notices by taking several simple steps, said Bob Hunter, director of insurance for the Consumer Federation of America.

"If you have a big price increase, you should shop" around, he said. "Not all companies have gone up as much as others." Hunter maintains that State Farm was the single biggest contributor to the recent rises. "About a year ago, (State Farm) stopped writing new business in 40 states for homeowners and started raising rates dramatically," he said. "That really opened the door for the whole industry to raise rates because they're...25 percent of the market."

        Homeowners policies shot up an average of 13 to 15 percent in 2002. But increases have slowed this year, giving consumers a chance to review habits that make them more vulnerable to price hikes and nonrenewal, he said.

6 tips to keep costs in check

        Here are six tips to better manage the tight underwriting environment and reduce the risk of rate increases and policy cancellations, according to experts:
 

1. Raise your deductible. "If you raise your deductible from $250 to $1,000, you can save a third or more of your premium," Hunter said. Such self-insuring for smaller losses reduces the chance the company will see you as nickel-and-diming it, and thus your premiums will be lower, he said.

 
2. Monitor and minimize your claims activity. Submitting claims frequently or for amounts up to $200 over your deductible doesn't pay, said Madelyn Flannagan, vice president of education and research for the insurance brokers group. "The more claim frequency, the more it's considered you'll probably have a larger loss somewhere down the line." Unlike several years ago, many companies now have a "two-claims rule," after which they may drop coverage, Hunter said.

 
3. Consider bundling your home coverage. Putting your home and auto policies or primary home and rental properties together often brings price breaks, Flannagan said. "Almost every company out there provides a substantial discount on multiline" coverage, she said, noting that those joint policies are often shielded from termination. You'll want to compare bundled discounts with other companies and with two separate policies to make sure you're getting the best deal, Hunter said. "Some of the companies that offer the discount aren't the cheapest companies."

 
4. Home improvements help. Insurers like to see - and sometimes require -- proof that the critical components are being kept up to date and hazard free, Flannagan said. "You want to make sure to keep the roof, wiring, plumbing and heating all in good repair. They affect your rate." When asking for a quote, make sure you know what simple additions can bring your costs down, Hunter said. "Some give discounts for fire and smoke alarms, burglar alarms, proper locks on doors."

 
5. Buyer beware. If you're in the market for a home, learn about the house's claim history before you buy it. Those that have extensive water-damage-claims histories, for example, can work against you even if you didn't own the home at the time. "A lot of policies are beginning to exclude prior damage," Flannagan said. To protect yourself, ask for a CLUE report, which details claim submissions to the carrier, or get a disclosure report from the seller's agent. Many homebuyers are insisting on seeing the Clue report -- a relatively new industry tool -- before they make an offer, Hunter said. "You don't want to go to closing to find you have no insurance or very high-priced insurance." Those shopping around for insurance also are wise to check their credit reports from all three credit bureaus since many insurers use credit scores to set insurance rates, he said.

 
6. Compare rates and service from a variety of companies before settling on one, including those that use different delivery models. The oldest kind -- the independent agent who matches you with insurance from a number of firms -- is still around but often costs more because he or she gets commission, Hunter said. Outfits such as State Farm utilize "captive agents" who only work for the company they represent, while firms such as Geico and USAA sell directly by phone and tend to offer the cheapest rates, he said.