I had a nasty surprise when I went to renew my home insurance coverage this week: my premium was up by almost 20 per cent over last year's rates, and there was a new "terrorism exclusion" attached to the policy.

The insurance industry around the world was hit hard by the terrorist attacks last fall. In Canada, insurance companies say rates were already on their way up prior to Sept. 11, but the terrorist attacks in the U.S. have forced premiums up higher and faster. Every homeowner has different levels of coverage, but increases such as mine are not uncommon.

The Insurance Bureau of Canada (www.ibc.ca) offers tips about how to save at renewal time. Shopping around for rates from different insurance companies and independent brokers tops the list. Another way to save on your premium is to increase the deductible, which is the self-insured part of an insurance claim. Some insurance companies offer discounts to seniors, or to people who have smoke alarms or home security systems in place. Some offer discounts if your home is mortgage-free, and if you have not made a claim for a number of years. You might also be able to get a better deal if you buy your car insurance from the same company as your home insurance.

My policy, from The Economical Insurance Group, defines terrorism as "an ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or threat of violence of force, committed by or on behalf of any group(s), organization(s) or government and/or installing fear in the public or a section of the public."

Loss or damage to my property resulting from terrorism, or by "any decision of a government agency or other entity to prevent, respond to or terminate" terrorism, is not covered in my insurance policy, although I guess I can take some comfort that "ensuing loss or damage which results directly from fire or explosion" is covered.

The policy also stipulates that there's no coverage for damage caused by chemical, biological and/or radioactive contamination resulting from terrorism.

Another exclusion on my policy is for the loss of data (information stored electronically) or claims arising from data problems.

When you're renewing your insurance, it's a good idea to find out what else is and is not covered by your homeowner's policy.

For example, two years ago, Toronto's unusually wet spring and early summer created big headaches for some homeowners when sewers backed up and flooded their basements. It became even worse when many people discovered that sewer back-up was not covered in their standard home insurance policies.

Sewer back-up protection is one of several optional coverages that you may wish to consider when insuring your home. Another is optional coverage for furnace oil spills. There are legendary stories about heating oil being pumped directly into basements when a pipe has broken or a tank has leaked. That's not a clean-up you want to take on yourself.

The Insurance Bureau of Canada says most policies also do not cover:

Published: April 25, 2002

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He is also consulting editor of Homes & Cottages, Canada's largest building and renovation magazine. Email jimhc@pathcom.com.