What is the difference between hazard insurance and homeowners insurance

More than likely if your mortgage company requests that you purchase hazard insurance they are referring to homeowners insurance. Before closing on a home many mortgage companies will require that you have homeowners insurance to finalize the paperwork. This is so that the lenders investment and your home is protected from certain hazards. Typically, homeowners insurance is referred to as hazard insurance.

Hazard insurance actually refers to a specific portion of your home insurance policy. Hazard protects you from covered perils noted in your agreement. Most mortgage companies want to know at the very least that their investment is protected and can be rebuilt from the ground up if needed.

If you’re a homeowner that owns a higher than normal amount of valuables in your home, you may want to look into a comprehensive homeowners insurance policy that can cover you for the replacement of your belongings. There are other things to keep in mind like additional living expenses and possible legal or medical fees as well. 

Your home is a big responsibility and keeping it safe and insured should be a top priority. If you have a mortgage on the home, more than likely you will need to cover homeowners insurance to satisfy your agreement with the lender. Although, if the home is free and clear you may not need to carry home insurance. These rules and regulations vary from state to state and insurance company to insurance company. Please always check with a local agent to find out the rules you must abide by. 

What is hazard insurance?

Typically, hazard insurance refers to coverage of the structure of your home. Homeowners insurance has different portions that are designed to cover you for different risks. Hazard insurance will not cover you for injuries to you or guests of your home. Usually this injuries are covered under the liability portion of your policy. 

The term hazard insurance is common due to mortgage lenders. Most require you to carry homeowners insurance before closing on a property. Hazard insurance referring to the structure of the home and the mortgage company lending you money for the home itself is more than likely the reason why your lender will refer to homeowners insurance as hazard insurance. 

Some think you may be able to purchase hazard insurance separate from homeowners insurance, this is not accurate. If the mortgage lender asked you to purchase hazard insurance, more than likely buying homeowners insurance will satisfy their request. 

Hazard insurance covers

Hazard insurance can cover a few different hazards. We listed a few of the more common ones below;

• Fire damage
• Hail
• Lightning
• Damage
• Theft
• Vandalism
• Fallen trees
• Vehicles that run into your home
• Explosions

Hazard insurance does not cover

As mentioned above, hazard insurance covers the structure of your home. Your personal belongings and injuries are covered under different portions of your home insurance policy. Flooding from natural disasters and earthquakes are also covered under different policy types. If you need coverage for flooding, you should look into flood insurance. If you need coverage for earthquakes, you’re going to want to look into earthquake insurance. 

If you have additional questions about what is and isn’t covered and you live in California, give us a call. The agents at Eugene C Yates Insurance Agency are experts when it comes to homeowners insurance and they’re really nice people! Call us today at 916 313 6100

How much does hazard insurance cost?

Each homeowners insurance policy is different. On top of that each insurance company has it’s own way of determining rates. The you have to think about the other factors that can affect the rate. For example, the value of the home, and the policy limits and deductibles. There really isn’t one policy that works for everyone. 

Due to the variations in the market and the variables that may effect the rate it’s always best to speak to a professional agent. The agents at Eugene C Yates Insurance Agency have access to some of the best home insurance companies in the industry. This gives them the ability to shop your situation with multiple companies so you know you’re getting the best possible rate for your scenario. If you’re looking for the best coverage at the best rates, give us a call 916 313 6100.