New York (CNN/Money) - Once upon a time, the stock market made money, mold was not considered a health hazard and homeowners insurance was something most of us simply took for granted.

But today we are in the midst of what many are calling an insurance crisis. Companies are raising homeowners' premiums across the board, and in some cases even tripling their rates. In many parts of the country issuers have completely shut their doors to new policies. Customers, meanwhile, are being scrutinized like never before and dropped if they file too many claims.

"It's gotten so that people will not use their insurance except in the most dire circumstances or are only buying insurance because their lenders are requiring it," said Doug Heller, senior consumer advocate for the Foundation for Taxpayer & Consumer Rights , a nonpartisan organization in California.

Insurance has even become a deal-breaker in real estate transactions. Without homeowners insurance, remember, it's virtually impossible to get a loan. Not only are insurers more picky about the risks posed by would-be buyers based on their record of prior claims and their credit history, they are looking closely at past claims made on the property itself. "I've heard from a lot of Realtors who have either seen transactions fall through or have had to really scramble to find their clients an insurer," said Marcia Salkin, who heads an insurance task force created by the National Association of Realtors in August.

"We're advising people to start shopping for an insurance policy the day they enter a contract," said Benny McMahan, CEO of the Texas Association of Realtors.

Insurers say escalating repair costs and the increase in mold-related claims (especially in warm, wet climates) among other things, are to blame for higher prices and more conservative underwriting practices. Of course, their sagging investment portfolios haven't helped matters either.

"For 19 years the homeowners market was a loser for the property and casualty companies, but they weren't increasing premiums because they were making up for it in other places, namely the stock market," said Madelyn Flannagan, vice president of education and research for Independent Insurance Agents & Brokers of America, an industry association. "Consumers are seeing price increases that should have been gradual over the last 10 years handed to them all at once."

In 2002, the average annual cost of homeowners insurance rose 8 percent to $553, according to the Insurance Information Institute, and in 2003 that number is expected to rise 9 percent to $603.

But in many parts of the country premiums are rising off the charts.

"Some people have really been hammered," said Lee Jones, spokesman for the Texas Department of Insurance. "We have heard from people whose premiums have increased 100, 200 -- even 300 percent."

Homeowners insurance is regulated on the state level, though to what extent varies greatly. In more than half of all states insurers are merely required to file their rate changes with the insurance commissioner. In other states, insurance companies need approval from commissioners before they can raise their prices.

Regulation helps but offers no guarantee against higher prices.

At the end of 2002, for example, State Farm Insurance asked the Mississippi insurance commissioner for permission to increase homeowners' premiums an average of 42.5 percent, with an increase of 79 percent in some areas. In early January, the commissioner gave the company, which is the nation's largest issuer of homeowners policies, permission to raise rates an average of 19.9 percent.

"The majority of people in this state and probably across the country purchase a home for the most amount of money they can afford, so when you tack on this additional insurance money that can be too much to take," said Quentin Whitwell, director of governmental affairs for the Mississippi Association of Realtors. In extreme cases, he says, spiraling insurance costs have forced people into foreclosure.

"While we understand that rate increases affect policyholders, we need to be financially sound to cover our policyholders," said Kip Diggs, a spokesperson for State Farm.

It's reached a point, in fact, that some insurance companies have begun dropping long-time customers who file even the smallest of claims. Worse yet, Heller said consumers don't even have to actually file a claim to put their insurance in jeopardy.

"You so much as ask about your coverage and you can get dropped," he said, citing an example of someone who was dropped by his insurer after inquiring – but never filing – about coverage for a lost ring.

State Farm acknowledges that it has a company policy to make note of such inquiries, and that policyholders are in fact obligated to report all losses, regardless of whether or not they file a claim. "Even if you did not file a claim, the property did suffer a loss, and because we underwrite the policy we need to take that into consideration," said company spokesperson Diggs.

Recently, conventional wisdom has been that consumers should opt for a higher deductible and consider not filing smaller claims, even if they've already met their deductible. There is still some wisdom in this advice. But Heller says consumers with legitimate claims should not hold back simply because they're scared of losing coverage.

"That's like going to a restaurant and getting double-charged for eating the food," he said.

The best thing consumers can do to protect themselves, Heller notes, is to complain to their state legislatures and insurance commissioners.

"Public policy makers are on the verge of addressing these issues," he said. "We need to continue to ring the bell and let lawmakers know we're not going to put up with what's going on."