A: Customers have several options to manage individual risk, and homeowners insurance is a form of risk transfer. Customers enter into a contract by agreeing to pay a premium to transfer the financial impact of risk to another party. In exchange for the premium, the insurance company agrees to accept the financial risks that exceed the deductible, as outlined in the policy language. The customer also agrees to responsibly maintain the home to avoid potential losses and protect the home from further damage if a loss occurs. If the customer does not maintain the home, the policy language provides the option not to renew the policy each year automatically.