Hurricane Isabel was a continent away, but its impact will be felt much closer to home when it's time to pay your homeowners insurance premium.

The property and casualty insurance industry is planning a bigger round of premium increases next year, but not because of nearby catastrophes—the industry spreads its risk nationwide. Of the 40 major disasters and 16 emergencies declared thus far this year by the Federal Emergency Management Agency, none occurred in California and only seven of the 33 federal fire management assistance efforts went for conflagrations in California.

Nevertheless, you'll share an average 8-percent increase in your homeowners insurance policy next year, up from 7 percent in 2003, according to New York-based Insurance Information Institute, a nonprofit insurance information organization sponsored by the property and casualty insurance industry. The industry blames the rate hikes on increasingly more expensive natural disasters, homeowners building or buying ever-larger homes and the related growing cost of building materials.

"Part of the increase reflects choices more homeowners are making," said Robert Hartwig, senior vice president and economist for the III. "People are taking advantage of record low interest rates and are moving into new homes or making additions to their existing homes in near-record numbers," he said. "These upgrades and additions are pushing up insurance costs. People expect their premium to stay the same, but they don't realize they have more house to insure," he added.

Critics, including Americans for Insurance Reform, argue the industry is making consumers pay for its own mismanaged investments and risky policy-writing habits. Whatever the reason, a recent industry trend has left a growing number of consumers hard put to find homeowners insurance coverage at an affordable price—or at all.

California's Department of Insurance recently reported a 71-percent rise in claims during the past year—from 1,891 to 3,230—submitted by homeowners who were denied insurance, had their policies canceled or could not renew their coverage. The department said many complaints came from people who only made inquiries about their coverage.

Sacramento Superior Court Judge Raymond Cadei recently overturned California Insurance Commissioner John Garamendi's emergency regulation to prevent insurance companies from relying solely on past claims to raise rates or deny coverage to homeowners. Garamendi plans to appeal the ruling.

Meanwhile, consumers faced with concerns about homeowners insurance cost and coverage should be aware of certain underwriting factors.

Premium costs rise for older homes, homes nearer coasts and natural- and weather-hazard zones and homes with a number of insurance claims. Mold-, water- and moisture-related claims are particularly troublesome. Poor credit risks are also likely to pay higher premiums, the industry says.

Newer homes, homes farther from hazard zones, homes equipped with security devices and homes with limited insured loss histories cost less to insure. Homeowners with better credit ratings are also likely to pay lower premiums.

Experts also advise:

• Educate yourself. Learn about current homeowners insurance issues from the California Department of Insurance online at http://www.insurance.ca.gov/docs/FS-Homeowner.htm.

• Shop early. If you don't have a policy, shop for homeowners insurance before you buy a home. Get a copy of the insurance loss history of any home you plan to buy. Your agent can help. Get the home professionally inspected to seek latent problems that could become insurance claims.

• Raise deductibles. Higher deductibles reduce your premium costs. Raise them only if you can afford the higher out-of-pocket cost you must pay for certain claims.

• Shop around. Prices vary from company to company. California's Department of Insurance offers an annual Homeowners Premium Survey. Standard and Poors (Standard and Poors) and AM Best Co. (http://www.ambest.com/ratings/index.html) rate insurers based on their financial stability.

• Upgrade systems. Modernize your heating, plumbing and electrical systems to reduce the risk of fire and water damage and related insurance claims. Earthquake retrofits and other upgrades also add marketing value when it's time to sell.

• Increase security. Discounts of 5 percent or more are available for smoke detectors, burglar alarms, deadbolt locks and security systems. Extra discounts may be available for sophisticated sprinkler systems and monitored fire and security systems. Before you buy, check with your insurer to determine which system is recommended. Also consider the extra layer of protection and value the systems provide even without a discount.

• Double up. Buy your home and auto policies from the same insurer. Some companies offer discounts for multiple policies.

• Credit counts. Maintain good credit. Insurers increasingly use credit-based insurance scores to set your premiums, approve or reject your policy request.

Real estate writer Broderick Perkins, executive editor of San Jose-based DeadlineNews.Com, writes regularly for
Saratoga News.