1. Homeowners insurance is required by your mortgage lender

While homeowners insurance is not required by law in Hawaii like auto insurance, you will most likely need coverage if you are financing your home. Homeowners insurance protects your lender’s investment from loss or damage caused by risks.

The minimum amount of homeowners coverage you have in place typically depends on the amount of your mortgage. Your lender may automatically factor in the homeowners policy payment to your monthly mortgage payment.

2. Insurance protects your home from loss

Property protection insures your home and property from such perils as fire, theft and vandalism. Whether there is minor damage to your home or it is deemed a total loss, the coverage on your policy will assist in paying for repairs and replacement of personal items.

When you’re purchasing or renewing your homeowners insurance, verify your policy pays out for damages on a replacement cost basis rather than an actual cash value basis to ensure you’re getting the most effective financial protection possible.

Since Hawaii is located in a region vulnerable to hurricanes, you will be required to purchase separate hurricane insurance coverage. Separate policy coverage for flooding may also be needed for homes near streams or lying in flood-prone areas.

3. It covers your personal belongings

If personal items in your home are stolen or destroyed by a covered hazard, home insurance may reimburse you for the value of those items, including furniture, electronics, appliances and clothing. Items such as laptops and other electronics covered under your policy are covered if it’s stolen from your home, your car, or away on travel. For example, if you are on vacation in Europe and your camera and clothes are stolen, those items are covered since they are considered personal property.

4. Insurance coverage protects you from liability

Your homeowners insurance does more than just cover the structure and contents of your home. That type of policy coverage, called liability protection, insures you if someone is injured on your property.  For example, if a guest is injured as a result of a fall in your home and files a liability lawsuit against you.

Ask your agent on the different type of coverage that would handle legal and medical fees. Some policies will handle lost wages if the injured person is out of work while recovering from the incident.

5. Temporary housing after a disaster

If your home is rendered unlivable after a fire, flooding or other catastrophe, coverage in most home insurance policies may help pay for temporary living costs while your home is being repaired or rebuilt. These costs may include hotel expenses or interim housing, food, laundry and dry cleaning, storage space, and internet/cable connection. You should check whether you have this particular policy coverage.