What we verified in “Home insurance explained: what it covers, how much to buy”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, homeowner's insurance pays for losses and damage to your property if something unexpected happens, like a fire or burglary (it is also called 'hazard insurance'); when you have a mortgage, your lender wants to make sure the property is protected by insurance and generally requires proof of coverage; many homeowners pay for it through an escrow account as part of the monthly payment; you can shop separately and choose the provider and plan that is right for you; standard homeowner's insurance does not cover damage from earthquakes or floods, though you may be able to add that coverage; and if you do not keep your own coverage, the lender may buy insurance and charge you, which may only protect the lender and may cost more.

   Sources 1 · What is homeowner's insurance? Why is homeowner's insurance required? (last reviewed August 8, 2024): 'pays for losses and damage to your property if something unexpected happens, like a fire or burglary'; 'your lender wants to make sure your property is protected by insurance'; 'through an escrow account'; 'You can shop separately for homeowner's insurance'; 'doesn't cover damage from earthquakes or floods'; lender-placed insurance · Checked October 17, 2026

2. The NAIC describes the parts of a homeowners policy: damage to the house (the face amount of the policy is the most you will receive), other structures (a detached garage, a work shed or fencing), personal property, additional living expense when incurred, comprehensive personal liability (protects you against claims arising from accidents to others on your property) and medical expense, which is paid regardless of legal liability.

   Sources 2 · NAIC, Homeowners Insurance (consumer guide): 'Damage to House' ('The face amount of the policy… is the most you will receive'); 'Other Structures'; 'Personal Property'; 'Additional Living Expense'; 'Comprehensive Personal Liability'; 'Medical Expense' ('payment is made regardless of legal liability') · Checked October 16, 2026

3. According to the NAIC, replacement cost is the amount it would take to replace or rebuild your home or repair damages, and actual cash value is the amount it would take to repair or replace damage after depreciation; the NAIC says it is important to insure your home for at least 80 percent of its replacement value; the deductible is the amount you pay out of pocket on each claim, and higher deductibles may be available at a reduced price.

   Sources 2 · NAIC, Homeowners Insurance: 'Replacement cost is the amount it would take to replace or rebuild your home or repair damages'; 'Actual cash value… after depreciation'; 'insure your home for at least 80 percent of its replacement value'; 'The deductible is the amount you have to pay out of pocket on each claim'; 'Higher deductibles may be available at a reduced price' · Checked October 16, 2026

4. The NAIC notes that floods and earthquakes are not covered by a typical homeowners policy; that you are not required to purchase insurance from the company your lender recommends; that there are unbiased sources to find out what different insurers charge for identical coverage, including your state insurance department; that you should check with your agent at least once a year to make sure your policy provides adequate coverage; and that a home inventory can be invaluable when deciding how much coverage fits your situation and should be stored in a safe, easily accessible place.

   Sources 2 · NAIC, Homeowners Insurance: 'Floods and earthquakes are not covered by a typical homeowners policy'; 'You are not required to purchase insurance from the company your lender recommends'; 'unbiased sources… including your state insurance department'; 'Check with your insurance agent at least once a year'; 'A home inventory can be invaluable' · Checked October 16, 2026

5. FEMA's National Flood Insurance Program (NFIP) provides insurance to help reduce the socio-economic impact of floods; most homeowners insurance does not cover flood damage; homes and businesses in high-risk areas with federally backed mortgages are required to have flood insurance; there is typically a 30-day waiting period for an NFIP policy to go into effect; and you buy it by calling your insurance company or agent, the same person who sells your home or auto insurance.

   Sources 3 · FEMA, Flood Insurance (last updated January 2, 2026): 'Most homeowners insurance does not cover flood damage'; 'are required to have flood insurance'; 'typically a 30-day waiting period for an NFIP policy to go into effect'; 'call your insurance company or agent' · Checked October 16, 2026

6. FEMA's Flood Map Service Center is the official public source for flood hazard information: you search by address, place or coordinates to see the official flood map, and downloaded or printed information may change or become superseded by new maps.

   Sources 4 · FEMA Flood Map Service Center: 'the official public source for flood hazard information'; 'Enter an address, a place, or longitude/latitude coordinates'; 'may change or become superseded by new maps over time' · Checked October 17, 2026

7. Under the Flood Disaster Protection Act, a regulated lending institution may not make a loan secured by improved real estate in a special flood hazard area where flood insurance is available unless the building is covered by flood insurance for the term of the loan in an amount at least equal to the outstanding principal balance or the maximum limit of coverage available, whichever is less; if the lender determines coverage is missing, it must notify the borrower to obtain it at the borrower's expense and, if the borrower fails to purchase it within 45 days after notification, the lender may purchase it and charge the borrower.

   Sources 5 · 42 U.S.C. §4012a(b)(1)(A) ('not to make, increase, extend, or renew any loan secured by improved real estate or a mobile home located or to be located in an area that has been identified by the Administrator as an area having special flood hazards'; 'covered for the term of the loan by flood insurance in an amount at least equal to the outstanding principal balance of the loan or the maximum limit of coverage') and §4012a(e)(2) ('If the borrower fails to purchase such flood insurance within 45 days after notification') · Checked October 17, 2026

8. Under Regulation X, force-placed insurance is hazard insurance obtained by a servicer on behalf of the owner or assignee of a mortgage loan that insures the property; a servicer may not assess a premium charge or fee for it unless it has a reasonable basis to believe the borrower failed to maintain the required hazard insurance and has delivered or mailed a written notice at least 45 days before assessing the charge and a reminder notice at least 15 days before (not sooner than 30 days after the first notice); within 15 days of receiving evidence that the borrower had the required coverage in place, the servicer must cancel the force-placed policy and refund the premiums and fees for the period of overlapping coverage; flood insurance required under the Flood Disaster Protection Act of 1973 is not covered by this rule.

   Sources 6 · 12 CFR §1024.37(a)(1) ('hazard insurance obtained by a servicer on behalf of the owner or assignee of a mortgage loan that insures the property securing such loan'), (a)(2)(i) ('Hazard insurance required by the Flood Disaster Protection Act of 1973'), (b) ('reasonable basis to believe that the borrower has failed to comply with the mortgage loan contract's requirement to maintain hazard insurance'), (c)(1)(i) ('at least 45 days before a servicer assesses on a borrower such charge or fee'), (d)(1) ('at least 15 days before a servicer assesses on a borrower a premium charge or fee related to force-placed insurance'; 'until at least 30 days after delivering to the borrower') and (g) ('Within 15 days of receiving'; 'Cancel the force-placed insurance'; 'for any period of overlapping insurance coverage') · Checked October 17, 2026

9. An escrow account is set up by your lender to pay certain property-related expenses; many lenders require taxes and insurance to be paid through it, and the loan servicer pays those bills for you.

   Sources 7 · What is an escrow or impound account? (reviewed September 11, 2024): 'Many lenders require that you pay your taxes and insurance using escrow'; 'Your mortgage servicer will manage the escrow account and pay these bills on your behalf' · Checked October 17, 2026

10. HUD-approved housing counselors provide independent advice on buying a home, renting, defaults and credit issues, often free or at low cost.

    Sources 8 · Find a Housing Counselor: 'advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'often at little or no cost to you' · Checked October 17, 2026

11. According to the CFPB, the homeowner's insurance premium is set by the insurance company, not by the lender; you get to choose your insurance company, and comparison shopping helps you find the policy you want and learn whether the lender's estimate is accurate for your situation; and you usually pay the first 6 to 12 months of premiums at or before closing.

    Sources 9 · Loan Estimate Explainer, page 2: 'The homeowner's insurance premium is set by the homeowner's insurance company, not by the lender'; 'You get to choose your homeowner's insurance company'; 'Comparison shop to find the insurance policy you want'; 'Usually you'll pay the first 6 to 12 months of homeowner's insurance premiums at or before closing' · Checked October 17, 2026

12. According to the Texas Department of Insurance, home insurance protects you financially if your home or property is damaged or destroyed by something your policy covers, like a fire or storm; the law does not require you to have home insurance, but if you still owe money on your home, your lender will require it; and most home policies don't cover damage caused by floods.

    Sources 10 · Home insurance guide: 'Home insurance protects you financially if your home or property is damaged or destroyed by something your policy covers, like a fire or storm'; 'The law doesn't require you to have home insurance. But if you still owe money on your home, your lender will require you to have it'; 'Most home policies don't cover damage caused by floods' · Checked October 17, 2026

13. According to the Texas Department of Insurance, home policies provide either replacement cost or actual cash value coverage; replacement cost pays to repair or replace your house and belongings at current prices, and actual cash value pays replacement cost minus depreciation (the loss of value from wear and age). In its example, a new roof costs $10,000 today and the damaged roof is 10 years old: with replacement cost and a $2,000 deductible, the company pays $8,000; with actual cash value, if that value is $7,000, it pays $5,000, so your out-of-pocket cost would be $5,000 instead of $2,000. A deductible is the part of a claim you pay yourself.

    Sources 10 · Home insurance guide, 'Replacement cost vs. actual cash value coverage' and 'Deductibles and dollar limits': 'Home policies provide either replacement cost coverage or actual cash value coverage'; 'Replacement cost coverage pays to repair or replace your house and personal property at current prices'; 'the current price for a new roof is $10,000'; 'If you have a $2,000 deductible, your company would pay $8,000'; 'Actual cash value coverage pays replacement cost minus depreciation'; 'Depreciation is a decrease in value because of wear and age'; 'the actual cash value might be $7,000'; 'your company would pay $5,000'; 'your total out-of-pocket costs for an actual cash value policy would be $5,000, compared with $2,000 for a replacement cost policy'; 'A deductible is the amount of a claim that you must pay yourself' · Checked October 17, 2026

14. The Texas Department of Insurance recommends making a list of what you own, because it helps you decide how much coverage you need and makes filing claims easier; updating it; photographing or videotaping each room, including closets, storage buildings and the garage, with the drawers open; and keeping the list and receipts for major items in a fireproof safe or at another location.

    Sources 10 · Home insurance guide: 'Make a list of the items you own'; 'A complete list of your property will help you decide how much coverage you need and will make filing claims easier'; 'Update your list regularly'; 'Photograph or videotape each room, including closets, storage buildings, and your garage'; 'Open drawers and photograph what's inside'; 'Keep the list and receipts for major items in a fireproof safe or at another location' · Checked October 17, 2026

15. The Texas Department of Insurance recommends telling your company as soon as possible, because most companies have deadlines to file a claim; listing the damaged property and, if possible, taking pictures or videos before any repairs; making only temporary repairs to protect your house and belongings, such as boarding up broken windows or tarping a damaged roof, because the company might deny the claim if you make permanent repairs before it sees the damage; keeping receipts, because to get full payment you may need to prove you replaced destroyed items; trying to be there when the adjuster looks at the damage; and, if you disagree with the adjuster's estimate or the amount offered, telling the company why. If that does not resolve it, one option is appraisal, which is for disputes about the amount of a claim, not about whether the policy covers a loss; in Texas you can also file a written complaint with the Department.

    Sources 10 · Home insurance guide, 'Home insurance claims' and 'Resolving problems': 'Tell your company as soon as possible'; 'Most companies have deadlines for you to file a claim'; 'take pictures or videos of the damage before making any repairs'; 'Make only temporary repairs to protect your house and belongings'; 'board up broken windows or put a tarp over a damaged roof'; 'The insurance company might deny your claim if you make permanent repairs before it sees the damage'; 'Keep receipts'; 'To get full payment, you may need to prove to the insurance company that you replaced destroyed items'; 'Try to be there when the insurance company's adjuster looks at your damage'; 'If you disagree with the adjuster's estimate or the amount the company is offering to pay you, tell the insurance company why'; 'The appraisal process is for disputes about the amount of your claim'; 'It isn't for disputes about whether your policy covers a loss'; 'Your complaint must be in writing' · Checked October 17, 2026

16. According to the California Department of Insurance, homeowners insurance generally does not cover the value of the land your home sits on, so when deciding how much coverage to buy you should consider the cost of labor and materials needed to rebuild, not swings in the real estate market; each company has its own formula for estimating replacement cost, so different insurers may suggest or require different dwelling limits; and when buying insurance you should compare prices, coverage, conditions and complaint information.

    Sources 11 · Residential Insurance: Homeowners and Renters: 'homeowners insurance does not generally cover the value of the land upon which your dwelling sits'; 'you should consider the cost of labor and materials necessary to rebuild the dwelling, not fluctuations in the real estate market'; 'different insurers may suggest or require different limits of coverage for your dwelling limit'; 'Make sure to compare prices, policy coverage and conditions, and complaint information' · Checked October 17, 2026

17. According to FloodSmart, the website of FEMA's National Flood Insurance Program (NFIP), most homeowners and renters insurance does not cover flood damage; the NFIP offers policies for homeowners, renters and businesses; for a home, building policies cover up to $250,000 of flood damage and contents policies up to $100,000 of damage to your belongings; building and contents coverage are typically bought separately and have separate deductibles; every company selling NFIP policies offers the same rates; the policy does not cover, among other things, belongings kept in basements or temporary housing and additional living expenses while your home is repaired; the policy lasts one year; and coverage takes effect 30 days after purchase, with exceptions, such as buying the insurance while making, increasing, extending or renewing a mortgage.

    Sources 12 · What you need to know about buying flood insurance: 'Most homeowners and renters insurance does not cover flood damage'; 'The NFIP offers flood insurance policies for homeowners, renters and businesses'; 'Building policies cover up to $250,000 of flood damage and contents policies cover up to $100,000 of flood damage for belongings kept inside your home'; 'Building and contents coverage are typically purchased separately and have separate deductibles'; 'Each one offers the same rates'; 'Personal property kept in basements'; 'Temporary housing and additional living expenses during your home's repair'; 'Your NFIP flood insurance policy lasts for one year'; 'Your flood insurance coverage will go into effect 30 days after your date of purchase'; 'There is no wait if you buy flood insurance while making, increasing, extending or renewing a mortgage' · Checked October 17, 2026

18. According to FloodSmart (FEMA), you are required to have flood insurance if you own a home or business in a Special Flood Hazard Area (SFHA) and have a government-backed mortgage, and some banks require it even if you don't live in a high-risk area.

    Sources 13 · Flood insurance eligibility: 'You're required to have flood insurance if you own a home or business in a Special Flood Hazard Area (SFHA) and have a government-backed mortgage'; 'Some banks require flood insurance even if you don't live in a high-risk area' · Checked October 17, 2026

19. According to FloodSmart (FEMA), high-risk flood areas, marked A or V on FEMA flood maps, face the highest risk; if you own property in a high-risk zone and have a federally backed mortgage, you are required to buy flood insurance as a condition of the loan, and if you don't have a government-backed mortgage, getting flood insurance is still strongly recommended because of the high risk.

    Sources 14 · What is my flood zone?: 'High-risk flood areas, A or V on FEMA flood maps, face the highest risk of flooding'; 'you are required to purchase flood insurance as a condition of that loan'; 'getting flood insurance is still strongly recommended, due to the high risk' · Checked October 17, 2026