What Is Homeowners Hazard Insurance?

September 16, 2022
Physical damage to a home covered under home insurance
Someone who is getting ready to buy a home will most likely hear that they're required to have hazard insurance or homeowners insurance. Most mortgage lenders will require at least hazard insurance when homeowners close. But what is homeowners hazard insurance? How is it different from homeowners insurance? Read on to learn about homeowners hazard insurance.

What Is Hazard Insurance?

Hazard insurance is a part of a homeowners insurance policy and is designed to cover the physical structure of a house and not bodily injuries. The structure of the house includes the walls, foundation, roof, and more. The term "hazard insurance" is a term used by lenders instead of an actual type of insurance policy that can be purchased on its own. Lenders may require hazard insurance to protect the structure of the home, which leads to the misconception that hazard insurance is a type of policy.

In reality, hazard insurance is just the part of the homeowners policy that covers the house, but it can't be purchased separately from homeowners insurance. If a lender requires this type of insurance, a homeowners insurance policy will meet that requirement.

What Does Hazard Insurance Typically Cover and Not Cover?

Hazard insurance covers damage to the physical structure of the home or the "hazards" a home could face. This is what hazard insurance covers:

  • Fire damage. If a home is damaged in a fire, hazard insurance will cover the cost of repairing the structure itself.
  • Hail. Large hail or heavy hail storms can cause damage to many things, including a home. Hazard insurance covers that damage.
  • Lightning. Lightning strikes are rare, but they can cause significant damage. Hazard insurance covers the damage from the strike and potential fires.
  • Theft. If a home is damaged from a theft, hazard insurance covers it. Other parts of a homeowners insurance policy will cover the stolen property.
  • Vandalism. If a home is vandalized, hazard insurance will cover the damage.
  • Fallen trees. Storms can cause trees to fall over, and hazard insurance can protect against the damage that would cause.
  • Explosions. Gas leak explosions can cause extensive damage to a home. Luckily most explosions are covered by hazard insurance.
  • Vehicle damage to a home. Rarely, a vehicle will collide with a home. Hazard insurance often covers the damages to the home should that happen.

Homeowners insurance policies—and therefore the hazard insurance portion—are all different, so different hazards may be covered under a certain policy.

In general, there are two things that hazard insurance wouldn't cover: flooding and earthquakes. Both of these hazards are covered by separate parts of homeowners insurance policies or even separate policies entirely, like flood insurance.

Is Hazard Insurance Affordable?

Hazard insurance is included in a homeowners insurance payment. The exact cost of an insurance policy including hazard insurance will vary depending on the value of a home as well as the deductibles selected. But hazard insurance doesn't need to be expensive to be extensive.

Acrisure helps provide you with the right homeowners insurance options, including hazard insurance. Let us help you find a policy that will protect your home and property without unreasonable expense. Contact us to help you connect with the right provider or request a home insurance quote online.


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