For most of us, our home is the largest single investment we'll make in our lifetime. Homeowners insurance protects the equity in your home. Equity is the value of a piece of property over and above any mortgage or other liabilities relating to that property. As you make renovations to your home, the equity in your property increases. Homeowners insurance makes sure if something happens to your home, you won't have to start building equity again [source: Home Insurance].