Whether you’re a first-time homebuyer or purchasing a second home, vacation residence, or investment property, it’s essential to understand hazard insurance vs homeowners insurance. Knowing what’s covered under each policy will ensure your house is adequately protected in case of an unexpected event. But is hazard insurance the same as homeowners insurance, or does homeowners insurance include hazard insurance? Keep reading to find out the key differences between homeowners insurance vs hazard insurance.
What is Homeowners Insurance?
A home insurance policy covers the structure of your home as well as your personal belongings in the event of damage or theft. It also provides liability coverage should someone get injured on your property. Most mortgage companies require you to have homeowner’s insurance in place before they will give you a loan, so it is important to understand what it is and what it covers.
In the event of a disaster, such as a fire or severe weather, homeowners insurance can help cover the cost of repairs or replacement. It can also provide financial assistance if you need to live elsewhere while your home is being repaired. If your home is burglarized or damaged by vandalism, your home insurance policy can help reimburse you for the cost of your lost or damaged belongings. And if someone is injured on your property, homeowner’s insurance can help you pay for that person’s medical expenses.
Homeowners insurance is not required by law. However, it is a way to financially protect yourself and your family in the event of an unexpected loss.
Is Hazard Insurance the Same as Homeowners Insurance?
Yes and no. So, what’s the difference between hazard insurance vs homeowners insurance? Hazard insurance is a subset of your overall homeowners insurance policy. “Homeowners insurance” and “hazard insurance” are not interchangeable terms, but they are also not two separate policies. Hazard insurance is included within your homeowners insurance policy.
The part of your homeowners insurance policy that’s considered “hazard insurance” typically covers the following perils:
- Fire damage
- Smoke damage
- Wind damage
- Lightning damage
- Other disasters listed in your policy
It’s important to note that the “hazard insurance” section of your home insurance policy does not include damage caused by floods or earthquakes. If you live in an area where these events are common, you will likely need to purchase additional coverage.
So, Does Homeowners Insurance Include Hazard Insurance?
Yes! Homeowners insurance does include hazard insurance–you cannot have one without the other. This type of coverage can provide peace of mind to homeowners because it will help cover expenses due to a peril covered under the hazard insurance section of your policy.
The two main types of coverage are actual cash value and replacement cost coverage. Actual cash value policies will reimburse you for the depreciated value of your damaged property, while replacement cost coverage will reimburse you for the amount it would cost to repair or replace the damaged property.
Need Homeowners Insurance? Get a Free Quote Today from Peterson Insurance!
Now you know the difference between homeowners insurance vs hazard insurance. At Peterson Insurance, we help homeowners in Havertown, PA and the surrounding areas find the coverage they need at a price that works. If you are purchasing a new home or want to ensure your current residence is adequately protected, call or visit us today to get a FREE home insurance quote!