What is "hazard insurance?"

What is the difference between "hazard insurance" vs. homeowners insurance?

"Hazard insurance" is a popular term used by bankers and mortgage lenders to describe dwelling coverage, or Coverage A, under a homeowners insurance policy. Dwelling coverage protects your home's physical structure against certain perils listed on your homeowners policy. "Hazard insurance" isn't a real type of insurance or coverage but has become synonymous with homeowners insurance. Remember, if you have a homeowners insurance policy, you already have what lenders refer to as "hazard insurance."

What "hazard insurance" covers vs. doesn't cover

"Hazard insurance" is another name for dwelling coverage on your homeowners policy, which may cover the following covered perils:

• Fire or lightning: May include damage to your home caused by lightning or an event caused by a lightning strike, such as a fallen tree or house fire
• Weight of ice, snow, and sleet: May include damage incurred due to a winter storm or snow accumulation, such as an ice dam that causes damage to your home or a leaking roof
• Windstorm or hail: May include damage caused by a wind or hail storm
• Theft or vandalism: May include stolen belongings and willful damage to your property
• Power surges: May include damage from an artificially generated electrical current or power surge

Homeowners insurance, or "hazard insurance," does not cover flooding or damage from natural events such as earthquakes, sinkholes, etc.

How much does "hazard insurance" cost?

There are several factors that go into the cost of your homeowners insurance, including where you live, what kind of home you have, and more.

Do you need "hazard insurance?”

Homeowners insurance, while not legally required in any state, is likely required as part of your loan agreement with your mortgage lender. If your home is paid off, you don't necessarily need to carry a homeowners insurance policy. However, because your home is often your most valuable asset, it's a good idea to carry a homeowners insurance policy to protect both your home against covered perils and your wallet in the event you're found liable for someone else's injuries or damages.

Safeguard your home with homeowners insurance