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Homeowners insurance policies protect your home (and, often, your personal possessions) from "casualty" (losses or damage to the home or personal property) and from "liability" (damages to other people or property). Often, homeowners insurance will protect your house from wind, fire, vandalism, theft, lightening, and other hazards. However, flood insurance is generally separate (especially if you live in low-lying areas or near a body of water).
Mortgage lenders will always require that you have this coverage before funding your loan. "Dwelling coverage" covers the cost to rebuild a house. The liability insurance portion of this policy protects you against accidents that occur on your property. The personal property coverage pays to replace your lost worldly possessions.
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