Homeowners Insurance Basics

A typical homeowners policy covers the dwelling, other structures, personal belongings, personal liability, and additional living expenses after a covered loss. Coverage depends on the policy form, limits, exclusions, and endorsements.

Homeowners insurance generally is not required by state law, but mortgage lenders commonly require it as a condition of financing.

Homeowners insurance responds to covered losses such as fire or theft; a home warranty generally addresses specified appliance or system breakdowns under a service contract.

HO-3 is a common owner-occupied homeowners form that generally covers the dwelling on an open-perils basis, subject to exclusions, and personal property for listed perils.

HO-5 is a broader homeowners form that often provides open-perils protection for both the dwelling and personal property, subject to policy conditions and exclusions.

A named-perils policy covers damage only when caused by perils specifically listed in the contract, subject to applicable exclusions.

Open-perils coverage generally protects against causes of loss unless the policy excludes them. Review exclusions such as flood, earth movement, and wear and tear.

Be ready with the property address, year built, square footage, roof details, construction materials, occupancy, claims history, and desired coverage limits.

Yes. Buyers typically arrange a policy to take effect on the closing date and provide evidence of insurance to their lender.

Compare the same dwelling limit, replacement-cost assumptions, deductibles, exclusions, endorsements, liability limits, and insurer service—not premium alone.