Understanding Home Insurance Coverage

Homeowners insurance is one of those necessary expenses of homeownership that you have to incur to have your home protected. If you are considering purchasing a house, you will likely be required to purchase homeowners insurance coverage. And it’s not just a good idea – it’s a requirement. Why? Because homeowners insurance protects your house in the case of theft or damage. Let’s take a look at the basics of homeowners insurance, its importance for new homeowners, and why mortgage lenders require it.

Home Insurance: Meaning

Home insurance helps you replace your home and personal belongings if they’re destroyed by an event covered by your policy or damaged beyond repair. It also helps you pay for temporary housing if that’s what you need. And if an individual is injured on your property or if you damage someone else’s property, it covers your legal liability.

Is it compulsory?

While not required by law, homeowners insurance coverage is a good idea if you have a mortgage. If not, it’s still pretty wise to get a policy. A homeowners policy is like an umbrella that can keep you from getting soaked in a financial calamity in case of a major storm.



This coverage protects your house, its structure, and the things in it, such as the windows and your furnace. There is also a dwelling endorsement for an attached garage and/or porch.

Personal Property

It includes your clothes, furniture, electronics, and appliances when you aren’t using them. Most home insurance policies cover these items anywhere in the world — not just inside your house — so they are protected if someone steals them.

Loss of Use

 Sometimes called “additional living expenses,” this section of your homeowners policy can help you pay for hotel stays and other services if your home is unusable after a disaster covered by your policy.


If an individual sues you for an injury or damaged property, personal liability coverage helps you pay. It also covers household members, including pets — so if your dog is at fault for the incident, you may be covered.

Medical Payments

Like liability coverage, medical payments coverage will pay if you’re at fault for causing harm to someone else outside your household. Unlike liability coverage, though, you will not have to be found responsible in order for the coverage to pay out.