Homeowner’s Insurance Guide: A Beginner’s Overview
AUTHOR Investopedia.com | Published December 2, 2016
Homeowners insurance (also known as home insurance or homeowner insurance) isn’t a luxury, it’s a necessity. And not just because it protects your home and possessions against damage or theft. Virtually all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price) and won’t make a loan or finance a residential real estate transaction without proof of it.
You don’t even have to “own” your home to need insurance; many landlords require their tenants to have coverage in the shape of renter’s insurance. But whether it’s required or not, it’s smart to have this kind of protection anyway. We’ll walk you through the basics of this type of policy. (For a breakdown of basic insurance terminology, check out Understand Your Insurance Contract.)