Homeowners insurance provides financial protection against disasters. A standard policy will insure the structure itself and the possessions you keep in it. 

Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.  Homeowners insurance also pays extra living expenses if, for example, you and your family have to stay in a motel for several months while your home is being rebuilt.

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

How much the insurer pays depends, of course, on the limits of your policy, which in turn depends on how much you've paid in premiums.