As a homeowner, it is essential that you insure your house for replacement costs against unexpected occurrences and perils such as fire, explosion, impact by aircraft or land vehicle, water damage, theft or other insurable peril. Homeowner’s insurance covers your property, its contents and personal liability of you (the policyholder), your spouse and dependent children. Although home insurance is not mandatory, most banks and mortgage companies require that you obtain it before funding to purchase a home can be issued. The type of dwelling building you live in will determine the class of insurance you will need to acquire.