Homeowner Insurance
Different types of insurance explained...
Homeowners insurance is always necessary and will be required by your lender in the event your home is damaged or destroyed by fire or if a tree falls through the roof during a storm. The lender is concerned that you have adequate insurance to repair your damaged home to protect your investment and also their mortgage.
Homeowners insurance also serves to protect you against theft and the event someone gets injured on your property and decides to sue. Depending on the amount of your deductible (usually $500-$1000) the insurance company will pay for all the repairs or represent you in the lawsuit and pay for the settlement.
Homeowner’s policies can be tricky. For example, they cover the water damage in the event you have roof damage and water floods your home through the roof, but do not cover water damage caused to your home by flooding or rising water. Flooding and rising water is covered separately by flood insurance which needs to be purchased in a standalone flood insurance policy.