Posted by Elisabeth Leamy, Fri Jun 30 2006, 08:40PM

I came home the other night to my Washington DC house and discovered the record rains we've been having had penetrated my basement

I came home the other night to my Washington DC house and discovered the record rains we've been having had penetrated my basement. To make matters worse, I'm pregnant, have zero energy, and my husband was out of town on business! Plus I had to leave town for a funeral. Argh! The one good thing that came out of all this is it gave me an excuse to share some important cautions with YOU about homeowner's insurance. It's quite possible I'm going to have to replace the carpeting in my basement. But will I be filing a homeowner's insurance claim to pay for it? NO.First of all, flooding is not covered by a standard homeowner's policy. The general rule of thumb is that water damage that comes from the sky down is covered. Water damage that comes from the ground up is not. (Most homeowner's policies do cover floods caused by burst pipes.) If rain had fallen into my house, I'd be covered. But since the water saturated the soil and then seeped in below ground, that's considered flooding.
If you live in a flood-prone area, you should definitely get flood insurance. In fact your mortgage company may require it. You can purchase flood coverage through your insurance agent, but it's actually provided by the federal government. Flood coverage takes thirty days to kick in, so don't procrastinate until your TV weatherman announces a flood warning.
But guess what? Even if my existing policy covered my damaged basement, I STILL wouldn't make a claim! If you make too many claims, your insurance company won't renew your homeowner's policy. Times are tight for insurance companies and they're balancing their budgets by getting tougher with their customers. Some states prohibit insurance companies from dropping you for weather-related claims. But if you make claims for things like stolen bicycles or if you make two or three claims within just a few years, you could find yourself without insurance.
What's worse, insurance companies report information about you to a central agency, so you may have trouble finding another company to insure your house. Even if you call your insurance company to make a claim and then decide not to, that telephone inquiry is sometimes reported to the central agency and could count against you. The best advice? Save your insurance for true catastrophes. That's what it's for. Don't make small claims. And if you call your company to inquire about making a claim, don't give your name. Tell the insurance company you're just doing research.

1. If your insurance company cancels your policy, find out why. If the reason has nothing to do with you, be sure you have that in writing so you can show the letter to other insurance companies when you shop for a new policy.
2. See whether you live in an area that's prone to flooding or earthquakes. If so, you'll need to purchase special insurance for those. Also consider whether your policy covers landslides, mudslides or sinkholes.
3. Take an inventory of your belongings. Write down makes, models and serial numbers. Save receipts as you buy new things. You can also document these belongings with photographs or a videotape.
4. If disaster strikes, don't clean up the damage until your insurance adjuster has seen the extent of it. On the other hand, your policy may require you to do what you can to protect your home and belongings from further damage. For example, if a tree falls on your roof during a storm, don't have the tree removed until the adjuster has seen it but do spread tarps over your furniture to protect it from rain coming through the hole.
5. If your house is damaged in a disaster, beware of unlicensed contractors who prey upon disaster victims. Don't make any quick decisions. Check out anybody and everybody before you hire them to work on your house.

If you feel the company's reasons for not renewing you are unfair, file a written complaint with your state insurance commissioner. That's the office that regulates insurance companies to make sure they're doing what's right.