What Is Hazard Insurance for Homeowners and What Does It Cover?

As a homeowner, one of your biggest priorities is making sure your property is protected. But with so many insurance options, it can be tough to figure out exactly what you need. It’s an important part of your homeowner’s insurance and can really help when disaster strikes.

In 2023, the National Oceanic and Atmospheric Administration (NOAA) reported weather-related disasters caused a staggering $93 billion in damages across the U.S. From wildfires to storms, these events are unpredictable and happen more often than we’d like. So, what is hazard insurance for home going to protect you against? It’s the coverage that helps you recover if your home is damaged by things like fire, severe storms, or even sinkholes. But what exactly does it cover, and how does it work?

What Is Hazard Insurance for Home?

It is a type of coverage that protects homeowners from damage caused by a variety of natural disasters and events. Essentially, it’s the insurance that covers your home from physical damage brought about by things like fires, severe storms, hail, snow, and even sinkholes. As long as the event is covered under your specific policy, hazard insurance can help cover the costs of repairing or replacing any damage to your home or surrounding structures.

It’s important to understand that hazard insurance is typically part of a broader homeowners insurance policy. Mortgage lenders often require homeowners to maintain hazard insurance as part of their mortgage agreement, ensuring that you and the lender are financially protected in an accident or disaster.

Many homeowners pay their premiums directly to their lender, who holds the funds in an escrow account. The lender then pays the insurance company on your behalf. However, it’s vital that you understand what your policy covers—because the types of hazards vary by region, and you want to make sure that your coverage includes the most common threats to your home. For instance, if you live in an area prone to flooding, you may need additional flood insurance, as this is not always covered under standard hazard policies.

How Hazard Insurance Works

Hazard insurance is usually a subsection of your homeowner’s insurance policy. It is specifically designed to protect the physical structures on your property, including your home and any nearby structures like garages, sheds, or fences. If a covered event damages these structures, hazard insurance provides the financial support to repair or replace them.

The key here is that hazard insurance only covers damage caused by certain “sudden perils.” These are events that occur unexpectedly and cause immediate damage. Here are some of the most common types of damage covered by hazard insurance:

Fires: Whether it’s a house fire or one caused by a nearby forest blaze, hazard insurance will help you cover the costs of repairing or rebuilding your home.

Hail: Severe hailstorms can cause significant damage to roofs, windows, and other parts of your home. Hazard coverage can help with the repairs.
Lightning: If a lightning strike causes a fire or electrical damage to your home, hazard insurance steps in to help cover the costs.
Windstorms: High winds from storms or hurricanes can damage roofs, windows, and siding. Your hazard coverage can help you get back on track.
Snow: Not only does hazard insurance cover damage from snow and ice storms, but it also accounts for the weight of heavy, wet snow or ice that can cause structural damage.
Rainstorms: Intense rain can lead to roof leaks or flooding in certain areas of your home. Hazard insurance can offer assistance with repairs.
Sinkholes: In some areas, sinkholes are a real risk. If your property is affected, hazard insurance can help you cover the cost of repairs.

If an event that’s not listed in your policy occurs, you’ll likely need to look into additional insurance coverage for that particular hazard. For example, damage caused by flooding is generally not covered under hazard insurance but can be addressed by adding flood insurance to your policy.

More: What To Do When Your Home Insurance Claim Is Denied Or Delayed?

Is Hazard Insurance the Same as Homeowners Insurance?

While hazard insurance is a critical part of your homeowner’s insurance policy, they aren’t exactly the same thing. Homeowners insurance is a broader policy that combines various types of coverage, including hazard insurance. Hazard insurance specifically covers the physical structure of your home and other nearby structures from sudden perils, while homeowners insurance also covers your personal belongings and provides liability protection.

Hazard Insurance Coverage: Covers the structure of your home, including walls, roofs, and nearby buildings, against specific hazards like fire, hail, wind, and snow.
Homeowners Insurance Coverage: Includes hazard insurance plus coverage for personal property (like furniture, electronics, and clothing), liability protection (for when someone gets injured on your property), and sometimes even additional living expenses if you’re displaced due to damage.

So, while hazard insurance covers physical property, homeowners insurance provides a much more comprehensive form of protection, extending to belongings and liability. This makes homeowners insurance an essential package for anyone wanting to fully protect their home and assets.

Can I Remove Hazard Insurance From My Mortgage?

If you have a mortgage loan, you’re required to maintain hazard insurance as part of your homeowner’s insurance policy. This requirement protects both you and the lender. If your home were to be damaged or destroyed, the lender would want to ensure that the property is covered so that they’re not left with an unpaid mortgage on a home that no longer exists.

Even if you’ve paid off your mortgage, maintaining hazard insurance to protect your investment is still a smart idea. If your lender is still involved, they’ll continue to ensure the insurance is in place. However, once you own the home outright, you have the option to adjust or cancel the coverage if you choose. However, doing so might expose you to risks, especially in areas prone to natural disasters or other hazards.

Protect Your Home with the Right Insurance—Call RRBH Law Today!

Now that we’ve covered what is hazard insurance for a home, you can see why it’s such an essential part of protecting your property. It’s a lifesaver when unexpected events cause damage, offering the protection you need to rebuild and get back on track. If you’re unsure about what your policy covers or need assistance navigating the insurance process, consulting with an experienced property insurance attorney is always a good idea.

At RRBH Law, we have over 10 years of experience negotiating over 3,000 cases, including those involving homeowners insurance and property damage. We can help you understand your rights, review your insurance policy, and guide you through the legal process to ensure you get the coverage and compensation you deserve.