Homeowner and Renters Insurance

How does a homeowner's insurance policy work? What does it actually cover? How can you get the best possible price? And should you file a claim? We've got answers to all your most pressing questions about insuring your home or condo, plus tips on renter's insurance.

Frequently Asked Questions

  • Is renters insurance required?

    Renters insurance is often required by your landlord as a condition of renting the property. But even if it’s not, it’s usually a good idea to have. It’s affordable—around $15 per month, on average—and it covers your personal belongings from events like fire or theft. It can also protect you if someone gets hurt in your home, by covering their medical costs and your legal expenses.

  • Is homeowners insurance required?

    If you have a mortgage, the lender will require you to have home insurance, often for at least 80% of the home’s replacement cost. But you can decide to increase your coverage and adjust your deductible. Homeowners insurance covers your home, personal belongings, and other structures; provides liability protection; and may pay for alternate accommodation if your home becomes uninhabitable. 

  • What is an all-risk insurance policy?

    An all-risk policy doesn’t specify covered perils. In other words, you’re protected from damage to your personal belongings and property from any source unless it’s specifically excluded in the policy. These policies are also known as “open perils” policies, “comprehensive form” insurance, and HO-5 policies.  

  • What does homeowners insurance cover?

    Homeowners insurance covers your dwelling, additional structures (such as a detached garage or shed), your personal belongings, additional living expenses (like if you can’t occupy your home due to a covered loss), and provides liability protection (in case you’re responsible for injuring someone or damaging their property at your house). You can adjust these coverages by adding endorsements.

  • What is an escrow account?

    If you have a homeowners insurance policy, part of your monthly payment might go towards property taxes and insurance. These payments are held in what’s called an escrow account until they’re due, which is typically on an annual basis. In this way, lenders know that homeowners are budgeting for those expenses—otherwise, the lender might be at risk.

  • What is a homeowners insurance declaration page?

    A homeowners insurance declaration page, or “dec” page, outlines your coverage. It typically includes: the different types of coverage you have, your policy limits, your deductible, your premium, the location of the insured property, any riders and discounts, the policy number, the policy’s term, and who’s insured.

  • What’s the difference between replacement cost and actual cash value?

    Replacement cost value (RCV) and actual cash value (ACV) are two insurance industry terms that determine how much you’ll be paid for a covered claim. The difference is that ACV considers depreciation. For instance, if a 5-year-old TV was destroyed and insured for ACV, you’d be paid the value of that 5-year-old TV now (minus the deductible). RCV would pay to replace it with a similar new model.

Key Terms

A woman in a floral dress proudly gestures toward her bright blue house with white shutters and a lovely garden
What Is Insurance to Value?
An insurance adjuster with a clipboard surveys flood damage to several houses
What Is an Appraisal for Homeowners Insurance?
A woman stands in her living room in shorts and rubber boots, pausing while mopping up flood water from the floor with a mop and wet towels.
What Is Mitigation in Insurance?
A cyclist bikes past a brick house with solar panels on its roof, which might qualify for a green home insurance discount.
Home Insurance Policies That Offer Green Home Discounts
Two people embrace next to destroyed home after storm
What Is FEMA?
Fallen tree on top of grey bungalow house
Hazard Insurance
A homeowner looks over her home insurance policy.
7 Ways to Lower Your Homeowners Insurance Premium
 An insurance adjuster examines flood damage to a house.
Insuring Your Home Through the National Flood Insurance Program
People walking in flood
What Is FEMA Flood Insurance Risk Rating 2.0?
A firefighter with a hose, fire raging behind him
What Is Fire Insurance?
Portrait of single mother with young sons in front of house
What Is a Home Warranty?
Luxury traditonal styled home
Best Homeowners Insurance Companies of August 2022
Home Repairs and Home Insurance
Help! My Insurance is Canceling My Policy Because I Did Not Do Repairs.
Damages in shared areas of a condo - loss assessment
Protect Yourself as a Condo Owner: Loss Assessment Explained
Sears Home Warranty
Sears Home Warranty Review
Man in blue button up shirt holding miniature house carefully in his hands
Best Home Warranty Companies of 2022
Image shows a highway with a crack down the middle somewhere in the southwest, as well as an infrared map of the U.S. of earthquake hot spots, and a home with a crack in the side. Text reads: "Facts about earthquake insurance: costs of earthquake insurance varies based on your location; home and personal property in 40+ states are at risk of earthquake damage; earthquake coverage is included in homeowners' insurance; earthquake insurance must be bought separately or added to your policy by endorsement."
Earthquake Insurance Pros and Cons
Flooded home with sandbags.
Additional Living Expenses Coverage: How to Get It and Why You Want It
An upset business woman sitting at a table in her restaurant learns that her business interruption loss is not covered by her policy from her insurance agent
Who Can Help With Insurance Claim Problems? How to File a Complaint
what water damage is covered by home insurance? flood, sudden or accidental discharge, sewer backup & overflow, storm-related water damage
Claiming Water Damage Coverages on Home Insurance
Cinch Home Services Review
Mature couple drinking coffee on porch
What Does a Home Warranty Cover?
A family of four enjoying the garden in their backyard
Understanding Your Home Insurance Options
Auto-Owners Insurance Homeowner’s Policy Review
A homeowner sits on a couch while looking at a laptop
Personal Property
A couple looks at a new home
How Much Dwelling Coverage Should I Have?
Construction worker in mask uses flashlight to inspect house foundation
Does Homeowners Insurance Cover Foundation Repair?
Caucasian family watching television together
What to Know about State Farm's Homeowners Policy
A homeowner does repairs on her home.
What Is a Covered Peril?
Close-up of woman and child holding model house in their hands
Buying the Right Home Warranty Plan
A family plays in their front yard.
What Is FAIR Plan Home Insurance and When Do You Need It?
American Residential Warranty Review
American Residential Warranty Review
woman trying to determine price of old items replacement value and actual cash value
Replacement Cost vs. Actual Cash Value in Insurance
American Home Shield
American Home Shield Review
Man and woman in home wondering what kind of insurance they need
What Is an All-Risk Insurance Policy? Do You Need One?
Select Home Warranty
Select Home Warranty Review
Two people looking at paperwork on a clipboard in an apartment.
How To Provide Proof of Renters Insurance
A man wonders how to replace his stolen vehicle
Does Renters Insurance Cover Car Theft?
A parent and child sit on a couch, using a tablet.
HO-3 Homeowners Insurance Policy
figuring out insurance claims payments
Waiting for a Home Insurance Claim Payment? Here's How It Works.
 Black Staffordshire bull terrier / Labrador mix
What Pit Bull Owners Need To Know About Homeowners and Renters Insurance
Unpacking fragile items after a move
How to Get Moving Insurance and What's Included in Your Policy
Woman putting money in purse saving money from insurance
What Are Waivers of Deductible in Home Insurance?
A parent works while a child plays nearby.
Act of God
Shot of a happy young couple moving into their new home together
What Is Homeowners Insurance?
Homeowners cope with the destruction from Hurricane Laura.
What You Need to Know About Hurricanes and Insurance Coverage
Inspector walking through home with tablet doing insurance inspection
Is the Insurance Company Inspecting Your Home? Here's What to Expect.
Happy father and daughter at home on their porch
Pros and Cons of Shelter Homeowner's Insurance
woman taking a home inventory with tablet
Your Guide for Making a Home Inventory and Why You Need One
Disaster area with high water sign
Average FEMA Payment and How To Make a Claim
Young couple packing belongings in cardboard boxes
Understanding What Home Insurance Policies Cover of Your Belongings
Person hosting through home-sharing rental welcoming guest
How to Get Affordable Airbnb or Home-Sharing Host Insurance
Man spending a lazy afternoon with his French Bulldog
How Does Getting a Dog Affect Your Home Insurance?
Two people carrying a board across a windy street after a storm.
Does Homeowners Insurance Cover Tornado Damage?
Sunny empty living room with hardwood floors and fireplace
Is Your Vacant Home Covered by Insurance?
Family in backyard of a high-value home
High Value Home Insurance
woman talking with home contractor
Get Tips on How to Hire a Contractor for Your Insurance Claim.
Couple leaving flooded area carrying their dog
How Much Are Costs of Repairs and Cleanup After Water Damage?
Couple standing in front of home
How to Negotiate a Change in Your Home Insurance Value
Image shows a silhouette of a woman entering a home. There is a "sold" sign with a cat sitting atop, and a rainbow Pride flag flying near the door. Text reads: "Tips for saving on your first home insurance policy: don't wait to the last minute, use an insurance agent (not a mortgage lender), get a home inspection, have an established insurance history, get a discount through your renters insurance company"
How First Time Homebuyers Can Save Money on an Insurance Policy

Page Sources