Homeowners insurance is a package policy and provides financial protection against disasters. A basic (or standard) policy insures the home itself and the things you keep in it. This means that it covers both damage to your property and your liability (or legal responsibility) for any injuries or property damage you or members of your family cause to other people. This also includes damage caused by your pets.
Disasters are covered, but there are exceptions:
You must buy separate policies for both flood and for earthquake coverage. Maintenance related issues are the homeowner's responsibility.
That is a great question and one that is often overlooked. The simple answer is, you need enough insurance to cover the following: