Most mortgage companies and lenders will require the owner to carry full insurance at least during the time that the loan is open. This provides protection to the lender by preventing the property or home being lost in a law suit. The financing company will stipulate the minimum amount of insurance that is required.

Home owners insurance packages will cover most types of insurance claims but do not cover floods or earthquakes. In areas where flooding or earthquakes are problematic a separate policy for these disasters can be purchased.

Home owners insurance will not cover damage to the house or property that is a direct or indirect result of owner negligence. That means that the owner is responsible for keeping the house in reasonable condition and cannot make insurance claims based on his or her lack of maintenance.