Homeowners' insurance policies combine various types of protections, like property damage, contents coverage, liability, medical payments, and temporary living expenses, to cover losses that might occur to a privately owned residence, or as a result of the ownership of a residence or real property.
A homeowners' policy is generally a term contract - in effect only for a fixed period of time. You pay a premium to the insurer each term and the contract specifies coverage dates. Most insurers will set the premium amount after evaluating certain risk factors, such as proximity to a fire house, burglar alarms, proximity to flood zones or earthquake faults and age of home, which allow them to determine whether it is more or less likely that the home will be damaged or destroyed. The premium amount will also take into consideration the cost to replace or rebuild the house in the event of a total loss.
Homeowners' policies do not cover each and every risk to a house. Standard excluded loss types such as flood, earthquake, and war require special insurance policies or special endorsements to the homeowner’s policy.
While homeowners' policies are not required by Nevada law, mortgage lenders can require that the homeowner purchase homeowners' insurance as a condition of the loan, in order to protect the bank if the home were to be destroyed.