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Hazard Insurance Part of or Separate from Homeowners Insurance?

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 | September 17, 2020

Hazard insurance is a portion of your homeowners insurance that protects your home and belongings from hazards, like natural disasters. In this guide, we go through everything you need to know about hazard insurance and what it does within your homeowners coverage. 

What is hazard insurance?

Hazard insurance refers to a subsection of your homeowners policy. It’s not a separate policy; it’s a part of your standard homeowners insurance. The purpose of hazard insurance is to help provide coverage against natural disasters, fire, theft, and other unanticipated hazards.

Hazard insurance encompasses dwelling, other structures, and contents coverage. This means it helps provide coverage against covered perils in the case of damage to the structure of your home, additional structures on the property, and your personal belongings.

You can’t purchase hazard insurance separately from homeowners insurance. So if your mortgage lender specifies that they require “hazard” or “dwelling” coverage, it essentially means you need a standard homeowners insurance policy. The limit they define will likely apply to your primary structures, since that’s what your lender has a stake in.

Your homeowners insurance also covers other types of policies along with hazard, including personal liability, additional living expenses, and medical payments.

What does hazard insurance cover?

Some common hazards, aka “covered perils,” that your hazard insurance can help cover include:

  • Fire and smoke
  • Hail and windstorms
  • Lightning
  • Theft
  • Vandalism
  • Fallen trees or objects
  • Vehicle or aircraft crash
  • Explosions, riots, or civil commotions
  • Volcanic eruption
  • Ice, snow, sleet
  • Tornado

Additionally, it may cover frozen and burst systems like AC, heating, and pipes. Your hazard insurance might also cover sudden and accidental damage from electrical currents.

Most hazard policies do not cover flood or earthquake. You’ll have to purchase these policies separately.

Named vs open peril

Your hazard insurance policy will be one of two types:

  • Named peril helps protect home and belongings against specific perils defined on your coverage
  • Open peril helps protect against everything except those perils explicitly excluded in the policy

Work with your insurance agent to find out which hazards you’re covered for and which are excluded. You don’t want a policy that excludes certain perils that your house might be at risk for. An InsuraMatch licensed agent will help you pinpoint potential gaps in coverage, so you can make sure you never end up without the proper coverage.  Call us today at (844) 300-3237.

Do you need hazard insurance?

For almost everyone, the answer is yes, you do need hazard insurance. Most mortgage lenders will require basic hazard insurance as part of your mortgage agreement. Some may require additional hazard insurance or higher limits as well. For example, if you live in tornado alley, your lender might require a higher minimum of hazard insurance to cover potential damages from a tornado.

Even if you don’t have a mortgage or your lender doesn’t require it, homeowners insurance is highly recommended for every homeowner. It helps ensure you are protected against major financial disasters. (And hazard insurance is a part of almost every standard homeowners insurance policy.) 

Hazard insurance in particular helps safeguard your home and assets in the case of devastating instances. It’s the policy that helps protect you from the most serious potential losses, like a fire that makes your house unlivable. For just a few hundred dollars per year, you can have added peace of mind that your home will be cared for. 

How much hazard insurance do I need?

Hazard insurance covers your dwelling/structure and personal property. So you want enough hazard insurance to cover the structure of your home and everything inside, in the worst-case scenario of a total loss.

For example, a wildfire tears through the neighborhood and completely destroys your home. You want enough hazard insurance to restore everything you had before the fire, from the bones of the house to the TV, so you can get back to living life soon. 

Most agents will recommend that your dwelling portion be the cost to rebuild your home in your area, which is often not the same as your home’s current estimated value on the market, and your contents coverage should be an entire inventory of all of your personal effects.

See if you have enough homeowners insurance in this article.

Hazard insurance is a must

Hazard insurance is an important part of your homeowners policy. You want to make sure it’s as comprehensive as possible, with a large list of covered perils and high enough limits to cover your house and belongings.

Homeowners insurance varies in price based on the age of home, value of home, building materials, policy limits, deductibles, security features, and more. So don’t shop based on price alone. You want to get comparable quotes that will give you enough coverage to truly and comprehensively protect your home in the case of a hazard.


At InsuraMatch, we’ll help you figure out just how much hazard insurance and homeowners coverage you need to weather the storms of life. Reach out to us to start comparing free quotes: (844) 300-3237

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