Updated November 2024
Have you ever wondered, “What is the difference between hazard insurance and homeowners insurance?” If so, you’re not alone. These terms often lead to confusion for homeowners and prospective home buyers alike, and there are a couple common misconceptions about what these insurance policies cover.
Our team at Peterson Insurance will strive to clarify the differences between these two terms, help you understand your policy options, and give you the information you need to thoroughly protect your home.
What is Hazard Insurance?
Homeowners insurance is a more comprehensive policy that includes hazard insurance, personal property insurance, and liability insurance. A great homeowners insurance policy offers protection for the physical structure of the house, the homeowner’s belongings, and even the occupants’ safety in case of an emergency. Key components of homeowners insurance include:
- Structural Coverage – Structural coverage Includes hazard insurance, and it’s designed to cover the costs of repairing damage to the home from specific events.
- Personal Property Coverage – If your belongings, such as expensive electronic devices, clothes, or furniture items, are lost, damaged, or stolen, this aspect of homeowners insurance will pay to repair or replace the possessions.
- Liability Coverage – If someone gets hurt on your property, liability coverage will pay for any legal fees and damages.
- Temporary Living Expenses – This key component of homeowners insurance offers temporary relief in case a homeowner can’t stay in their home for a covered event. For instance, if a homeowner can’t live in their house while their roof is getting repaired, their homeowners policy will pay for hotel stays, meals, and related expenses.
Hazard Insurance Vs. Homeowners Insurance
Whether you’re a current homeowner or a prospective buyer, it’s important to fully understand your homeowners insurance policy. We encourage you to carefully review your current plan and thoroughly vet any other homeowners policies to clarify which events are covered. Here are some key ways to ensure that you have the protection and coverage you need:
- Review covered perils. Make sure to pay close attention to the list of covered perils under the hazard insurance component of your homeowners insurance policy.
- Consider your unique needs. You may want to adjust your coverage depending on the value of your personal possessions, the risks in your neighborhood, and other factors. For instance, if you want extra protection against theft or vandalism, you can speak with an agent about increasing your coverage in these areas.
- Consult with your insurance agent. If you have any questions about what your policy covers, it’s strongly recommended to contact your agent to get the clarification you need. They’ll be prepared to help you understand your current coverage, find additional coverage options, and give you greater peace of mind about your home’s protection.
- Verify lender requirements. Before making any lasting changes to your homeowners insurance policy, double check to ensure that the policy will meet the minimum coverage requirements set by your lender. If your updated plan doesn’t offer adequate hazard insurance, for instance, you may need to pay for lender-placed insurance, which tends to be more expensive.
Our team at Peterson Insurance is here to help you navigate the confusing world of insurance, and our advisors would be more than happy to assist you in your search for the right policy. You can even get a custom quote for a policy tailored to your needs.
If you’re not sure if you currently have adequate homeowners insurance coverage, contact our advisors to get a free policy review today. Our experienced team can help you fully understand your coverage and give you the information you need to protect your home and your peace of mind.
