Everything You Need to Know About Homeowners Insurance

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In the excitement of purchasing a new home, it can be easy to forget about some details that are, in the grand scheme of things, pretty vital. This is especially true if you’re focused on making necessary repairs or figuring out the logistics of a cross-country move. Homeowners insurance is one of these elements of the homeownership process that might have a tendency to become a bit of an afterthought — but it’s essential for protecting the large asset you’re looking forward to enjoying for years to come.

Like all forms of insurance, homeowners insurance is a contract that, according to Investopedia, is “represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses” that arise due to damage and other events covered in the policy. In addition to protecting you against financial liability, homeowners insurance is important for another key reason: You may not be able to carry a mortgage without purchasing it. If you’ll soon be (or you’re currently) in the market for homeowners insurance, understand the basics of these policies to better prepare for your purchase.