If you've been in a house for 5 years or longer, chances are you may be grossly underinsured for homeowner's coverage. In fact, you'll only discover it after a catastrophic loss when it's too late.

So you must read the coverage limits when your policy comes up for renewal every year. Let your insurer know if there's no way you could rebuild your house for the specified amount. Note the name of the rep you speak to and the date/time of the call. That way if your insurer refuses to raise your limits and a catastrophic loss happens, you've already begun building a case against them.

Clark's insurer would not raise his limits, so he triggered a clause in his contract and got a 3rd party appraiser to look at his home. The insurer accepted the appraisal and then complied by raising his coverage.

The chances of a catastrophic loss are minimal, but why take the chance of having your wallet disrupted just as terribly as your life in the case of the unthinkable?

Clark recently bought a foreclosure in a mountain community. In this case, the insurer sent an appraiser out to him and told Clark he needed more insurance because of the expense of rebuilding on a mountain.

The penny-pincher always takes big deductibles so he doesn't get hurt much. Don't have the $500 deductible of yesteryear. Today, insurance can only be used in the case of a catastrophic loss. It's a "use it and lose it" proposition. Clark saved 31% on his last renewal by having a higher deductible.

Meanwhile, Fireman's Fund has a rider that allows you to rebuild your house as an energy-efficient structure in the event of a catastrophic loss. The San Francisco Chronicle reports that it only costs the average homeowner about $70 more for this policy. There are also other insurers doing these "green" riders. But this should not be treated as incentive to burn down your house just to get it rebuilt as an energy-efficient model!