It protects against disasters—whether natural, manmade or mechanical. A standard policy insures the home, as well as your possessions. Because this insurance is packaged, it covers liability for any harm, loss, and property damage that you or your family members cause others. And it includes additional living expenses in case you are temporarily displaced because of damage from a fire or other insured disaster.
While you are not legally required to have homeowners’ insurance, mortgage lenders stipulate that you do. It protects their investment in the home in case of a natural disaster or catastrophic event.
If your mortgage is paid up—or you never had one—it is still a good idea to have homeowners’ insurance to protect your home and your belongings.