Definition
A policy that covers damage to your home and belongings and your liability to others, subject to limits and exclusions.
What it means
Homeowners insurance usually covers the house itself, other structures, personal property, extra living expenses if you cannot live at home after a covered loss, and liability if someone is hurt on your property. Mortgage lenders require it, and it is often paid through an escrow account. Standard policies generally do not cover flood damage; flood insurance is available from the National Flood Insurance Program run by FEMA and from private insurers, and many policies exclude earthquakes too. Policies may pay replacement cost or actual cash value, which subtracts depreciation. Renters can buy renters insurance for their belongings and liability. Premiums vary by location, building cost, deductible and claims history and are regulated by state insurance departments.
Example
With a $1,000 deductible, a covered $9,000 roof repair results in an $8,000 insurance payment. Water from a river flood would generally not be covered without a separate flood policy.
Illustrative numbers only. Your situation will differ.