Hazard Insurance For Homeowners: A Breakdown

A storm coming in behind a yellow home

Dealing with hazards is a standard (but unfortunate) part of homeownership. Though your yard loves rainstorms, the lighting, strong winds and hail that often come with them can sometimes do more harm than good. Storms, explosions, fires and other natural events are called hazards in the home insurance industry, and you’re protected from them through your regular home insurance policy.

When buying home insurance, you’ll also want to take a quick pass at exactly what hazards your insurance company will cover. While most policies have standard coverage for weather-related events such as lightning or smoke damage, coverage amounts can vary by company. Worried about what hazards your home is protected from? Don’t sweat it. Our experts have broken down the process for you below.

Key takeaways:

  • Hazard insurance is a part of your homeowners insurance policy that covers the cost of damage to your home from natural or man-made disasters.
  • Certain natural disasters, such as earthquakes, floods and hurricanes, won’t be covered under hazard protection.
  • Catastrophe insurance differs from hazard insurance in that it’s a separate policy that provides additional protection that hazard insurance does not.

What is hazard insurance?

Hazard insurance is a part of your homeowners insurance policy that covers the cost of damage to your home from natural or man-made disasters. Hazards such as a fire, lightning, hail and even vandalism are possible no matter where you live. That’s where your hazard insurance coverage comes in, as this section of your policy provides financial aid when replacing or repairing your home.

What's the difference between hazard insurance and homeowners insurance?

Hazard insurance is a part of your homeowners insurance policy that protects your home’s structure from damage or total loss that occurs from various hazards. Home insurance, however, is a broader policy that includes hazard protection, as well as coverage for other perils and general liability. So, while you don’t need to worry about purchasing any add-ons to protect you from most hazards, it’s still important to see exactly which ones you’re protected from in your home insurance policy. While hazard coverage is pretty standard across insurance companies, it never hurts to double check in case you want additional protection (especially if you live in a high-risk area).

What does hazard insurance cover?

The hazard insurance portion of your HO-3 policy covers a wide range of natural disasters and other environmental hazards that might affect your home. And while some exclusions can apply, this typically includes:

  • Artificial electrical current
  • Damage from an aircraft or vehicle
  • Explosion
  • Falling objects
  • Fire
  • Freezing
  • Hail
  • Lightning
  • Pipe damage
  • Riots or civil commotion
  • Smoke
  • Theft
  • Vandalism
  • Volcanic activity
  • Water or steam overflow
  • Weight of snow or ice
  • Wind

What does hazard insurance not cover?

Though your home insurance policy is pretty extensive, hazard insurance does have its limitations. Certain natural disasters, such as earthquakesfloods and hurricanes, won’t be covered. But that’s not to say these policies aren’t necessary. Depending on your state or proximity to the coast, mortgage lenders may require you to purchase a separate policy to protect your home from these hazards.

If you live in a high-risk area, you may want to consider flood, hurricane or earthquake insurance as these disasters aren’t covered under hazard insurance.

If you have questions on what is and isn’t included in your policy, it’s a safe bet that anything that isn’t explicitly named won’t be covered. But you can also chat with your insurance agent to confirm what coverage you lack.

Catastrophe vs. hazard insurance

While hazards and catastrophes are often thought to mean the same thing, they have quite different definitions in the home insurance world. Hazard insurance is the term used for the section of your home insurance policy that protects you from natural disasters, and it doesn’t require any extra purchase on your end. Catastrophe insurance, however, is separate from your home insurance policy and provides protection from unique hazards (such as hurricanes or earthquakes) that could affect your home.

How much does hazard insurance cost?

Since hazard protection is part of your regular homeowners insurance coverage, you won’t have a set dollar amount for this type of protection. Instead, you’ll pay one lump sum that includes protection from named hazards and will cover damage to your home, belongings and liability. Usually, insurance premiums are paid upfront each year, though some mortgage companies put hazard insurance into escrow and have you pay a portion of the costs to them each month.

The cost of your policy depends on the cost of your home, its location, the cost of your personal property coverage and the policy limits you select. If you have an older or customized home, you may be looking at a higher insurance cost as the costs of building materials are often higher. Those in high-risk areas, such as earthquake or flood zones, can expect to pay more since they’re often required to get additional coverage.

Ensuring your home is protected from any natural disaster is crucial. Not only will it help give you (and your wallet) some peace of mind, but it can also help restore your home to its former glory after a disaster by offering comprehensive financial coverage. Wanting to upgrade your coverage or protect your home for the first time? Look no further, chat with the home insurance experts at Hippo!


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