What is hazard insurance on a home

hazard insurance

Usually if you hear the term hazard insurance for your home, you can safely assume they are talking about a typical homeowners insurance policy. Hazard insurance is homeowners insurance.

Hazard insurance most of the time refers to a specific section of the homeowners insurance policy that protects the home from perils that should be covered within the policy. The mortgage lender wants to know you are covered for the structure of the home if it were to be destroyed by a fire, storm or theft. The policy should cover the costs to fully rebuild the home if there was a total loss. 

Before you have closed on your home, the mortgage lender will more than likely require that you have home insurance inlace before the loan funds. The bank will want to know they are completely covered if the worst were to happen. 

In addition, you as the homeowner want to insure you’re covered for your personal belongings. There are other things to be concerned with as well. You may encounter higher living conditions if forced from your home or even worse legal expenses. 

So, is hazard insurance the same thing as home insurance?

Yes, homeowners insurance and hazard insurance are the same coverage. If you hear your lender say you need to get hazard insurance, more than likely they are talking about homeowners insurance.

Homeowners insurance does have different insurance products tied to it to keep in mind. There are dwelling fire policies that will cover the landlord. On a case to case basis this may be sufficient to get a mortgage loan, although you should be aware that it will not cover all of your needs. 

What’s homeowners insurance?

Homeowners insurance is an insurance product designed to protect the homeowner and mortgage lender if the worst were to happen. Homeowners insurance will cover the home if it were burglarized, damaged, or someone is hurt on the property and sues. 

There are many different types of homeowners insurance. Typically there are 8 different home insurance coverage types. They will cover you for a variety of risks. If you have questions regarding your home insurance policy, please feel free to reach out to one of our wonderful agents 916 313 6100.

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