Homeowner’s insurance: protecting the home you’ve worked to buy

If a first home has been bought or is about to be bought in a new country, a lender may require homeowner’s insurance before the purchase can close, and it’s worth understanding exactly what it does and doesn’t cover. Here’s what to know.

What is homeowner’s insurance?

Homeowner’s insurance is a policy that protects property and belongings against damage, theft, and certain liability claims, in exchange for a regular premium payment. The NAIC’s overview of homeowners coverage⁠(opens in new window) confirms that a standard policy generally covers the dwelling, other structures, personal property, and personal liability. If a mortgage is in place, a lender will almost always require homeowner’s insurance for as long as the loan is outstanding.

How homeowner’s insurance works

A typical policy covers the physical structure of the home, personal belongings inside it, and liability protection if someone is injured on the property. Coverage is usually subject to a deductible, an amount paid out of pocket before insurance coverage kicks in, and a policy limit, the maximum amount the insurer will pay for a covered claim. Not every type of damage is automatically covered, and certain risks, such as flooding or earthquakes in some regions, typically require a separate policy or endorsement purchased in addition to a standard homeowner’s policy.

Homeowner’s insurance for immigrants and newcomers

For immigrant homeowners, a few specific questions come up that mainstream homeowner’s insurance content rarely addresses. Owning property both in the U.S. and in a home country means understanding that a U.S. homeowner’s policy generally only covers the U.S. property, not anything abroad, which matters if broader coverage is being assumed than actually exists. If family members abroad occasionally stay in the home for extended visits, checking with the insurer about how this might affect coverage or liability protection is worth doing rather than assuming it’s automatically the same as coverage for a permanent household member.

Building credit history and understanding the full costs of homeownership, including insurance, are often intertwined steps for a newcomer working toward a first home purchase, a process covered in more depth in a 2025 guide to buying your first home for immigrants⁠(opens in new window). Insurance costs can vary considerably by location, home age, and other factors, making it worth comparing several insurers rather than accepting the first quote received.

Community context

How unfamiliar this whole process feels often depends on whether homeownership and property insurance were common where someone previously lived. Some countries have far less developed private insurance markets, or rely more heavily on government-backed disaster coverage, which can make an American-style homeowner’s policy, with its specific deductibles, exclusions, and add-ons, feel like an entirely new system to learn rather than a familiar product under a different name.

How to get homeowner’s insurance

1. Get quotes from multiple insurers. Rates and coverage details can vary considerably between companies for the same property, so comparing at least a few options helps in finding better value.

2. Understand what a specific policy covers and excludes. Asking directly about flood, earthquake, or other regional risks that may not be included in a standard policy matters.

3. Confirm the lender’s specific coverage requirements. Most lenders require a minimum coverage amount tied to the loan balance, which an insurance agent can help meet.

4. Review and update the policy periodically. As a home’s value changes or more belongings are acquired, coverage needs may change too, making an occasional review worthwhile.

What a standard policy typically excludes

Understanding what a standard homeowner’s policy leaves out matters just as much as understanding what it covers, since assuming broader protection than actually exists is a common and costly insurance mistake. Flood damage is almost universally excluded from a standard policy and requires a separate flood insurance policy, often through a government-backed program, regardless of how unlikely flooding might seem for a specific property. Earthquake damage is similarly excluded in most standard policies, requiring its own endorsement or separate policy in earthquake-prone regions. General wear and tear, pest infestations, and damage from a lack of routine maintenance are also typically excluded, since insurance is designed to cover sudden, accidental events rather than gradual deterioration.

How claims and premiums interact over time

Filing a homeowner’s insurance claim, even for a legitimate loss, can sometimes lead to a higher premium at the next renewal, since insurers factor claims history into their risk assessment. This doesn’t mean a legitimate claim should be avoided, particularly for a significant loss, but a pattern of frequent smaller claims can affect future premiums more than filing occasionally for major losses. Some homeowners choose to pay out of pocket for very minor damage specifically to avoid this effect, weighing the deductible and potential premium increase against the repair cost itself.

How much coverage you actually need

A common mistake is insuring a home for its full purchase price or current market value, when the amount that actually matters for insurance purposes is the rebuilding cost, what it would take to reconstruct the structure from the ground up at current construction prices. Land value, included in a purchase price or market value but not something that would need to be replaced after a covered loss, should generally be excluded from the coverage amount. Many insurers use a replacement cost calculator that factors in square footage, construction materials, and local labor and material costs to arrive at an appropriate coverage figure.

For personal belongings, most policies default to a percentage of dwelling coverage, often around 50 to 70 percent, but this default may not accurately reflect what’s actually owned, particularly if valuable belongings have accumulated over time or been brought from abroad. Taking a home inventory, photographing or listing possessions and their approximate value, gives a much clearer picture of whether default coverage is adequate or whether a higher limit or a separate rider makes sense for particularly valuable items like jewelry or electronics.

Renters insurance as a stepping stone

For immigrant families who rent before eventually buying a home, renters insurance offers a smaller-scale preview of many of the same concepts covered by a full homeowner’s policy, protecting personal belongings and providing liability coverage, without covering the physical structure itself since that responsibility falls to the landlord’s own insurance. Renters insurance is typically inexpensive relative to homeowner’s insurance, and many landlords now require it as a lease condition.

In Summary

Homeowner’s insurance protects one of the most significant investments many immigrant families make in a new country, and understanding what a specific policy covers, especially around property abroad or extended family visits, helps in avoiding an unpleasant surprise later.

This publication is provided for general information purposes only and is not intended to cover all aspects of the topics discussed herein. This publication is not a substitute for seeking advice from an applicable specialist or professional. The content in this publication does not constitute legal, tax, or other professional advice from Remitly or any of its affiliates and should not be relied upon as such. While we strive to keep our posts up to date and accurate, we cannot represent, warrant, or otherwise guarantee that the content is accurate, complete, or up to date.