What is Hazard Insurance and Why do Homeowners Need It?

With all the money you’ve put into your new home you want to ensure it’s going to be properly protected. Hazard insurance is a type of insurance which protects against any physical damage caused by natural disasters, ranging from fire, to flood, to even an earthquake. If any of these were to occur you don’t want to be stuck without a home, this is why it’s important to obtain hazard insurance in addition to your traditional homeowners insurance.

Hazard does not equal homeowners

Hazard insurance is not synonymous with homeowner’s insurance and thus should not be confused. A basic homeowner’s insurance policy is meant to provide coverage for your personal property, liability, and loss of use. Lenders won’t require homeowner’s insurance, however, hazard insurance will be required as it guarantees they’ll be reimbursed if something should happen to your home. So, if you wish to protect the contents of your home you’ll want homeowner’s insurance. The physical dwelling will be protected by hazard insurance.

Location, location, location

The location of your home will determine the type of hazard insurance you need to purchase. Most often you will purchase a standard type of hazard insurance which covers common perils such as lightning, heavy wind, hail, electrical surges, damage caused by frozen or busted pipes, etc. However, if you live in a location which is at a higher risk for certain disasters such as fires or earthquakes, like parts of California, you may be required to purchase additional hazard insurance coverage.

Guard against Mother Nature

More often than not basic homeowner packages will include the lowest level of hazard insurance, but in some instances you may be required to have more. As long as you have what’s required you and your home will be guarded from Mother Nature.

What do you wish you knew about hazard insurance before you bought your home?