Homeowners insurance is for unexpected events. It covers the home itself and things that you keep in it, along with the liability for any injuries and property damage you, members of your family, or family pets cause to other people.
There are generally 4 components in a homeowner’s policy:
- Coverage for the structure.
- Coverage for your belongings.
- Liability coverage.
- Living expense coverage if you can’t live in your home due to a fire or other insured disaster.
Note that most policies don’t fully cover all 4 of these components, and an insurance company might have several different policies with different coverage. Most policies specifically exclude flood and earthquake damage, which can be purchased separately. Damage from lack of maintenance, such as mold or termites, is usually not covered either.