There are two types of home insurance, buildings and contents insurance. If your house is made uninhabitable or needs to be rebuilt due to storm, flood or fire then your buildings insurance would cover your financial losses.

Most mortgage companies will require you to have buildings insurance because the money they lend you is safe so long as they can repossess your house if you are default on your payments. Different policies offer many different levels of cover, but as a general rule the cheaper policies tend to offer less financial protection by covering fewer expenses and offering lower maximum payments.

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