This is quite surprising, given that general homeowners' insurance can be secured for as low as 900 baht per year for a house or 1,100 baht for a townhouse for a policy offering coverage of up to one million baht.

Policies can be structured to protect against a variety of risks, ranging from fire, lightning strikes, floods, gas explosions or natural disasters. Coverage generally is for actual losses, up to the limit stipulated in the policy and after taking into account any deductions.

Additional features can also be set in a homeowner's policy, ranging from special coverage to account for certain risks such as wind damage or flooding, to coverage of losses incurred from theft.

Some policies will also offer compensation if your home must be vacated after a disaster, helping cover expenses for relocation or staying at a temporary location while repairs are made.

Insurance companies use very complicated statistical models to help set prices for coverage, based on assessments of the likelihood of a natural disaster striking a given area. But as a general rule of thumb, a buyer can expect to pay 50-500 baht extra in annual premiums for every million baht in general coverage.

Many insurers have joined with local banks to offer service packages to new homeowners, offering natural disaster coverage, theft coverage, third-party coverage as well as repair expenses.

Indeed, many banks offering new home mortgages will require a borrower to take out some form of insurance, in order to protect their investment.

Any insurance buyer needs to carefully consider not only the policy details and coverage amounts, but also their own prospective needs and asset values. Reading the fine print is crucial _ a five million baht homeowner's policy, for instance, will typically specify far lower coverage amounts for cases such as theft.

Homeowners with expensive furniture, appliances and furnishings would do well to contact a number of general insurers and ask for different quotes on coverage limits and premium rates.

But just as underinsuring one's home introduces risks, buyers can also lose from overinsuring. One key principle from insurance is that a policy pays the replacement value for a loss. Say you have a 21" television that was damaged in a flood. Your policy might offer coverage in the millions of baht, but come claim time, you will receive only what is needed to replace your original television.

Or say you pay an annual premium of 900 baht for a one-million-baht policy on your home, even though the home's actual value might be just 500,000 baht. If you suffer a loss, you can expect to receive only up to 500,000 baht _ a homeowner could have saved up to half his annual premium payments by taking the right amount of coverage from the beginning. As a result, buyers should make as realistic an assessment as possible about the value of their home and furnishings, to avoid having to pay excessive and unnecessary premiums.

In the event of a loss, the claims process can be expedited if you have detailed inventories and documentation regarding your assets and their values.

In any case, remember that your total insurance limit represents the responsibility of the insurer in the case of total loss. But it's rare that a disaster results in a complete loss _ more commonly, damage is incurred only to some rooms or certain items within a home. In such cases, don't expect to receive a full payout up to the policy limit, as the insurer will instead offer compensation based on a calculation of the value of the real losses.

Another factor to consider is how best to pay for your policy. Premium rates are usually lower for buyers purchasing multi-year coverage upfront, as opposed to renewing one's policy year by year.

But remember that your asset values change with each year as well. If you were to compare your home today with values five years from now, your property may very well be more valuable, while your interior furnishings would likely have lost value from depreciation. One disadvantage to purchasing a long-term, say a 20- or 30-year policy, is that the buyer loses some flexibility to adjust coverage based on the changing value.

Most experts suggest purchasing coverage over a span of three to five years as a suitable period balancing between premium savings and flexibility to readjust coverage based on changing asset values, inflation and risk profiles.