Why buy home insurance?

* Owners: To protect both your house and personal property.
* Tenants: To protect your personal property.
* Everyone: Protection against liability for accidents that injure other people or damage their property.

If you have a mortgage on your house, most lenders require insurance for at least the outstanding balance of the loan. If your lender requires coverage, you may choose your own insurer; you aren't required to purchase coverage from the insurer your lender recommends.

Home insurance, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.

The cost of homeowners insurance often depends on what it would cost to replace the house and which additional riders—additional items to be insured—are attached to the policy. The insurance policy itself is a lengthy contract, and names what will and what will not be paid in the case of various events. Typically, claims due to earthquakes, floods, "Acts of God", or war (whose definition typically includes a nuclear explosion from any source) are excluded. Special insurance can be purchased for these possibilities, including flood insurance and earthquake insurance. Insurance must be updated to the present and existing value at whatever inflation up or down, and a appraisal paid by the insurance company will be added on to the policy premium.