What a great ideal Insurance companies collected a small fee from millions of homeowners in case something really bad happened to your palace such as a hurricane, tornado, a pipe bursting, a fire or other catastrophic events. Even if you accidentally started a fire or forgot to turn off your bathtub faucet, you were covered. Houses cannot be financed without these policies. In the past when some homeowners would lose their job, suffer a divorce or other life changing event, mortgage payments and homeowners premiums could not be made. Some considered burning down their house a viable option.