With so many apparent similarities between the two, hazard insurance and homeowners insurance are often mistaken for the same thing. Standard homeowners insurance policies include hazard coverage, but what about standalone hazard insurance?
Here is a basic comparison of hazard insurance and homeowners insurance to help clarify the differences and similarities:
Hazard insurance
Hazard insurance protects you financially if your property is damaged by a specific natural disaster. Some examples of hazard policies include tornado insurance, earthquake insurance and flood insurance.
Hazard insurance is typically required in certain areas where hazards are not otherwise covered by the standard homeowners insurance policy.
Homeowners insurance
Homeowners insurance includes basic hazard coverage for damage to your home from extreme weather, theft and other perils. It specifically includes dwelling coverage, which protects the physical structure of your home, and personal property coverage, which protects your belongings.
Homeowners insurance protects the contents of your home as well as the home itself. This is a major difference between homeowners and hazard insurance. Generally, home insurance covers a broader range of hazards, but won’t be able to help you if certain specific hazards, like tornadoes, occur.
Do you need hazard insurance?
Whether you require additional hazard insurance is dependent on your personal preference and where you live. In regions where tornadoes are common, for example, your mortgage lender might require you to get a tornado insurance policy before approving you for a loan.
Even if not required, having hazard insurance coverage can give you peace of mind. If you have an additional hazard policy, you’ll know you have financial coverage if your home and belongings are damaged by something otherwise excluded from your home insurance.
About the Author
Sandy Malbrue
Hi, I'm Sandy Malbrue and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search for representation or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my 14 years real estate experience to work for you. Be it to gain wide exposure for your home with my marketing plan, negotiate offers or manage the transaction once you've accepted an offer, in a way that will get you the best price and cause the least amount of disruption to you life as possible.
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