Hard drives fail, and they fail often, with 22% of hard drives failing in their first four years of usage. You can generally consider your computer's drive reliable, but it's really like playing the lottery and hoping your drive isn't one of those that ends up with disk errors that make your data inaccessible before you had a chance to back those files up.
The first thing to have in place, then, is an automated offsite (online) backup service like CrashPlan and Backblaze. For about $5 a month, you can rest assured that even if your hard drive drops dead or your home burns down (your computer within it), your files, settings, photos, and other important data are saved.
Recently, my family's computer has been on the fritz--even if it manages to boot into Windows, it's impossible to launch any program or even get to the command prompt. I've reset it through Windows 8's startup troubleshooting, but the nagging feeling that it's a hardware problem--that is, the hard drive is going to die any second now--makes me want to invest as little time troubleshooting this further as possible.
To that end, I used Seagate's awesome SeaTools. There's a Windows version that quickly tests your drive for errors (mine failed the short test) and a DOS tool that can be run at startup from a CD-ROM or USB drive. The DOS tool didn't work on my machine for some reason, but it can possibly fix hard drive errors so you can salvage the drive.
PassMark DiskCheckup keeps tabs on your hard drive's SMART (self-monitoring analysis and reporting technology), to gauge your drive's reliability. This tracking and the drive's self tests are meant to diagnose your hard drive's life span.
Finally, there's Windows' own built-in chkdsk. Run it from the command line (Win+X keyboard shortcut and choose the administrator option for opening the command prompt, then enter this command to run checkdisk and fix any disk problems chkdsk /F).
If these utilities show your hard drive has errors and can't be repaired, it's time to make sure you have a recent back up of your files, and then weigh your options between replacing the drive and reinstalling Windows and your programs or getting a new computer. With laptops dropping to record lows this year ($99 for a laptop in one Black Friday sale), it's a tough call. (One I'm still debating.)
The moral of this story, though, is that drives fail all the time, unexpectedly. Keep tabs on your drive's health and maks sure you have a solid backup plan.