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You've worked hard to buy that new home -- now make sure it's protected.

Unfortunately, buying homeowners insurance is not the simplest exercise in the world because it fills so many different roles.

It not only covers the cost of the house itself, but also the contents inside, including the loss of its use (staying at a hotel if there's a fire, for example); the loss of other certain personal possessions of the homeowner outside the home or any accidents that may happen inside the home, shielding you from nasty lawsuits.

But here's the bottom line: If your home were gone tomorrow, would insurance rebuild the house and replace all your stuff? Many policies will offer this "replacement" value as the default coverage, but be sure to ask so you know for sure.

If it's not replacement value, watch out for policies that offer "fair market" or "cash value" insurance policies. These will reimburse your items for their current value, which takes into account depreciation and wear and tear, which might be far less than what it costs you to replace your belongings. And you have to inventory all the stuff -- it's a pain.

If you have replacement value insurance, be in contact with your agent if you make any renovations on the house that might affect its worth -- and thus its replacement value.

The premium is what you pay for the insurance, and you can save on the premium in several different ways. If you install sprinkler systems or fire alarms, which help protect the structure and the contents inside, the insurance company could give you a break.

Also, if you agree to a higher deductible, which is the amount you pay in the even of a claim, your premium is lower. Just make sure you have the deductible amount on hand in case you need to make a claim.

When deciding how much insurance to buy, focus on home replacement costs, not the value of the land. The land won't burn down, but the house will. So concentrate on covering the home and the contents inside. Be sure to discuss this with your insurance agent.

Many insurance policies will cover your household goods at 50 percent of the home's replacement cost. Check through your belongings and determine if it's enough coverage.

You should also investigate coverage for your high-value goods, like artwork. Insurance companies will often have a ceiling on how much they'll cover, so you'll need to investigate whether you need a special "rider" to your coverage.

Next, create an inventory of all your stuff to ease the claims process. Several Web sites now offer software that make it easy to inventory all your stuff by room and record purchase dates, serial numbers and other data. You can also upload photos for a visual record.

In addition to this, videotape inside and outside your home for further proof of the value of your things.

This article was written by Allison Bisbey Colter, a contributor to Relocation.com, a leading provider of information about moving, home improvement and insurance issues related to the relocating process.

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