How does home insurance work?

Home insurance works by providing financial support after you experience a loss that is covered by your policy. Policyholders pay a monthly or annual premium, which is often included in mortgage payments if you have a home loan. Those monthly payments buy you coverage for your valuable assets, your home, and your liability.

If a loss occurs that you think should be covered by your policy, you submit a claim. Your insurance company may send an adjuster to your property to help determine if your policy covers the damage. If your claim is approved, most companies send checks with the reimbursement amount.