If you plan to lead a conventional life, odds are you will need insurance. You’ll need health insurance, car insurance, and eventually home insurance. The latter is often the most perplexing since we have no prior experience with it as we do with health insurance.

What exactly is home insurance and how bullet-proof is your coverage? For starters, home insurance, in theory, provides you with financial protection against disasters. These disasters can involve your home, the contents of your home, or any liabilities within your property that could lead to a lawsuit…like when your dog bites the pizza delivery guy.

However, home insurance doesn’t mean your home’s invincible. Unless you’ve purchased specialized insurance, it can’t protect you against floods, nuclear war, earthquakes, or poor maintenance. Don’t slack off with your home’s upkeep—negligence does not go over well in insurance court.

The most common scenario with homeowners insurance, however, involves receiving some sort of compensation for damage to your property and its contents. For when the time comes, it is important to know how compensation is calculated. The insurance company will either pay for the repair, or you can get cash value. However, while you might have paid $500 for your grill, the insurance company will pay you back whatever the grill is currently worth, usually a lesser value.

Homeowners insurance is an expense you can’t avoid. And while it might feel daunting at first, there’s comfort in knowing that you’re protected against most calamities.