Homeowners insurance
Homeowners insurance pays for covered damage to your house and belongings, like from a fire, and protects you if someone sues over an injury or damage tied to you or your home. Your mortgage lender won't let you close without it.
New Jersey example
Say a Princeton home has a made-up $300,000 dwelling limit. Other structures like a detached garage are typically covered at 10% ($30,000) and belongings at 50% ($150,000). Flood damage is excluded, and there is no grace period in New Jersey if a premium payment is late.
Official source
Everything You Wanted to Know About Buying a Home (NJ Department of Banking and Insurance)
This is a plain-English summary. Rules and dollar amounts change, so check the official source or a professional before you file or sign anything.