Hazard insurance and homeowners insurance are often mistaken for the same thing due to the similarities they share. While standard homeowners insurance policies include hazard coverage, standalone hazard insurance serves a different purpose.
How do you know if you need hazard insurance? Here is a guide to help you understand the basics:
Hazard insurance can protect you financially from damage caused by hazards like fire, lighting, wind and other natural events. While homeowners insurance includes protection from a broad range of hazards, certain specific events are excluded.
In certain areas where specific hazards like tornadoes or earthquakes are common, you may be required to get a separate hazard insurance policy. This combined with your regular homeowners insurance coverage means you’re prepared for anything.
Another key point of comparison of what these two types of insurance will pay to replace. Hazard insurance typically refers to coverage for the structure of your home, including the roof and foundation. Homeowners insurance, however, includes coverage for your personal belongings and furnishings.
Whether you should have additional hazard insurance largely depends on where you live. In regions prone to flooding, for example, your mortgage lender might require you to get a flood 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 in an extreme weather event.
By comparing the hazard insurance cost with the potential cost of replacement and repairs, you can determine whether it makes sense to add it into your budget. Consult your insurance company to find out what options you have and whether a hazard insurance policy is right for you.
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Marsha Collins-Mroz, Broker, "Global Partners in Real Estate"
Marsha brings her combined 46 years of successful real estate brokerage experience and expertise to every transaction. Recognizing the overwhelming demand for personalized and objective consulting services and assistance, Marsha expanded her business model to a national and international scale. She consults and oversees the acquisition and disposition of primary residences, vacation/second homes, and commercial real estate. And presents on U.S. opportunities in Europe, Asia, and the United States. Her personally vetted network of Global Partners are uniquely skilled and positioned to assist with the needs of her clients; focusing on advancing their knowledge of local markets and opportunities, empowering them to make informed decisions.
