If you need a loan to buy your home, you will be required to purchase homeowner’s, or hazard, insurance. The reason is simple, lenders want to know that you are protecting their investment from harm. Even without the mortgage requirement, you should carry homeowner’s insurance.
In some ways, homeowner’s insurance is the easiest type of insurance to purchase. You basically decide (1) what you want to cover and (2) how much you are willing to pay as the deductible amount on any claim.
What kind of coverage should you get? Most people purchase a general policy that covers the house and its contents. Condominium and co-op owners need their own unique policies, but they still cover the unit and its contents.
Floods, earthquakes, and mud slides are never covered on a regular homeowner’s policy. A “riot of civil commotion” may or may not be covered. Since September 11, 2001, terrorist attacks, terrorism insurance has become an issue in some places. You may have to purchase separate insurance to cover each of these risks.