Discover how hazard insurance works and how it forms the foundation of a homeowners insurance policy.
Hazard insurance isn't separate from your home insurance, but is basically a type of coverage included on your policy. It's the part of your policy designed to protect the actual structure of your home from hazards:
- Fires or lightning
- Wind or hail damage
- Fallen trees
- Theft or vandalism
what is hazard insurance on a mortgage?
Most lenders will require you to purchase hazard insurance. Technically they are part owners of your house and home hazard insurance helps protect their — and YOUR — investment. If you have an escrow account with your mortgage lender, then you pay for your homeowners insurance, including hazard coverage, from that account.
is hazard insurance the same as homeowners insurance?
Hazard insurance is actually a part of your homeowners insurance policy. So while your mortgage lender might require that you have hazard insurance, what that usually means is homeowners insurance — which covers a number of hazards, plus a whole lot more.
what does hazard insurance cover on a homeowners policy?
Hazard insurance is basically the part of your homeowners insurance policy that covers the actual structure of your house for damage caused by:
- Fires and smoke
- Theft and vandalism
- Falling objects, like a tree branch
- Weight of ice, snow, and sleet
- Vehicles (or aircraft) running into your home
- Riots or civil commotions
open perils vs named perils
A "peril" is just another way of saying "hazard." In insurance terms, open perils simply mean that a policy will cover anything that happens to your property, but typically comes with specific perils that are not included. Named perils, on the other hand, list only the things that are covered. Because a standard homeowners policy is so wide-ranging, it's often a bit of both open and named.
what are other types of homeowners coverages?
Homeowners insurance covers more than just your home's structure. It also offers financial protection for your personal belongings (up to your chosen coverage limits). If someone's hurt on your property, guest medical payments coverage can help foot hospital bills. And if they decide to sue, liability coverage can help pay for legal fees. Homeowners coverage can even cover temporary living expenses if your home's unlivable after a covered incident … true story!
which hazards aren’t covered by homeowners insurance?
Hazard insurance on your homeowners policy typically doesn't cover damage from flooding, earthquakes, landslides, and mudslides. You'll usually need to buy separate policies for these particular hazards. Although, earthquake and flood insurance policies are only necessary in locales prone to those events.
how much is home insurance?
The Federal Reserve Bureau says that the average annual home insurance premium is somewhere in the range of $300-$1,000. Keep in mind, insurers look at many, many factors when calculating your rate. Rebuilding costs. Where you live. Your chosen coverages. Your chosen deductible. Prior insurance history, if any.
how much hazard insurance coverage do i need?
It can be scary to think about the whole structure of your home being destroyed. But when thinking about the hazard insurance portion of your homeowners policy, it's good measure to have enough to cover the current rebuilding costs of your house.
And if you're wondering where to start? Check out the handy-dandy home insurance calculator, only from Esurance. It helps calculate home insurance coverages and limits based on your answers to a few easy questions. Talk about surprisingly painless!
get reliable protection for your home and more with esurance
At Esurance, we know the kind of stuff life can throw your way — from natural perils like tornadoes and hailstorms, to intentional acts of mischief like theft, vandalism, and even arson. That's why we offer a wide selection of coverage options that you can tailor to your needs.
Plus, we offer many homeowners insurance discounts to help make protecting your home affordable.
Get a homeowners insurance quote online to see how simple, transparent, and affordable insurance can be.
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