Hazard Insurance is a kind of indemnification that protects the owner of the property against any kind of damage caused by any natural event and hazards like fires, severe storms, and hail/sleet. It only refers to coverage for the structure of the owner’s home only.
Hazard insurance also includes theft and vandalism, among others. Other kinds of damages like any accident or any damage by humans will be covered by other insurance policies within your homeowner’s insurance policy or liability policy.
What is covered under hazard insurance?
Any kind of structural damage to the house which is caused by natural disaster and destruction is covered under the hazard insurance policy as it refers to the policy of homeowner insurance. This insurance policy, specifically mentions which perils are included and excluded from it, here some of the perils that are usually covered under the hazard insurance.
- Fire or lightning
- Windstorm
- Any kind of Explosion
- Riot or civil commotion
- Aircraft
- Vehicles running into your house
- Smoke
- Vandalism
- Theft and Robbery
- Falling objects or trees
- Weight of snow, ice, or sleet.
- Hails
- Accidental release or overflow of water or steam
- Sudden and fortuitous tearing or slashing apart, cracking, burning or bulging
- Freezing of sanitation and plumbing
- Unexpected and accidental damage from an artificially generated electrical current
- Volcanic eruption
What is hazard insurance on a mortgage?
Hazard insurance on a mortgage is generally a subdivision of a homeowner’s insurance policy that protects the main dwelling and other nearby structures of the house which is also known as the protection against lender’s investment.
Hazard insurance is a requirement of the lender, which mostly depends on the risk factors associated with the particular home. So when someone makes the grade for a house on a mortgage, he may be required to add hazard insurance as well because when you take out a mortgage, the lender or the house owner will require you to take out hazard insurance as a protection against their investment so they can easily cover any kind of expensive damage.
What is the dissimilarity between Hazard Insurance and Mortgage Insurance?
Understanding the minor difference between hazard insurance and mortgage insurance can be tricky and confusing. But here it is, hazard insurance is the protection against any kind of natural destruction which includes natural hazards like fires, severe storms, and hail/sleet, theft and vandalism, among others.
Whereas, mortgage insurance is a kind of protection against the investment when the lenders or the homeowners can take out when they take out a home loan or when someone is buying a house. Mortgage insurance protects the lenders or the homeowner against borrower default, in case the borrower is unable to make payments.
Is hazard insurance and homeowners insurance the exact thing?
Clearly not, hazard insurance is a kind of insurance which is a part of home insurance policy. As mentioned above hazard insurance is a protection against any kind of natural destruction which causes structural damage to the house.
Moreover, Homeowners insurance is a kind of insurance policy which usually protects personal belongings from specific risks including the financial protection against any kind of incident or theft and damage to your home and belongings sustained in more ordinary ways. Any kind of damage caused by natural incidents such as earthquakes, storms and floods are not covered under the homeowner’s insurance policy.
As a part of homeowner policy, here are some of the home insurance policies that protect against natural hazards which includes,
1. Dwelling coverage
A protection against the physical and structural damage such as any damage to walls or hail dents your siding. Dwelling coverage may help pay for repairs.
2. Other Structure coverage
This coverage extends to structures other than an actual home. It includes the protection against the garage, fence or shed on your property.
3. Personal Property Coverage
This coverage is dedicated to the personal belongings of the person, including the financial protection against any kind of incident or theft that are damaged or destroyed by certain perils such as fire, theft or lighting. This coverage helps to replace the destroyed personal items.