If your house were to burn down tomorrow, would you be able to pay for rebuilding and replacing your belongings? Most people would find themselves at a great loss, which is why homeowners insurance is such a valuable investment. The protection it offers could literally help you rebuild your life after a catastrophe.

Home insurance has two main components: coverage for the structure of your house and coverage for the contents within your house. The structure portion should be enough to fund rebuilding your house from the ground up. The contents portion should take into account the overall total value of your stuff, like furniture, clothing, kitchen appliances, collections and more.

Home insurance is not required by law, but most mortgage lenders will require you to hold a policy throughout the duration of your loan. When getting a policy, remember that flooding and earthquakes are generally excluded from most standard policies and you will need to add coverage for those disasters separately if you wish.