For over 20 years at Campion Insurance, we have helped many homeowners insure their greatest assets, their homes.
A common question we get is, “What is hazard insurance?” or “Is hazard insurance included with my home insurance?” or “What is the difference between hazard and home insurance?”
So, today we wanted to shed some light on this topic and answer these questions for you.
It is imperative for you to have a specific amount of hazard insurance integrated into your homeowner’s insurance to get a mortgage loan for your new home. Hazard insurance is included in a homeowner’s insurance policy – it is not a different coverage type. Hazard insurance is very instrumental in ensuring the safety of your house, your family and you.
What does Hazard Insurance mean?
The coverage for only the structure of your home is commonly known as hazard insurance. Any other type of damage will be covered by other coverages included in your homeowner’s insurance policy. Hazard Insurance doesn’t generally have to do with the coverage that protects you from the effects of damages caused by you or your visitors after a mishap that may typically be covered by liability coverage.
Hazard insurance is a fairly common term as many lenders will mention it but it isn’t well understood. The only part of the homeowner’s insurance policy directly related to the home structure itself is the hazard insurance, so this is why your mortgage loan provider may request for hazard insurance at a minimum before they issue you a loan. This may generate the wrong notion that hazard coverage can be procured independently from homeowner’s insurance, which is not correct. If your lender has indicated that you need hazard or dwelling coverage, keep in mind that acquiring only a homeowner’s policy will meet their demands, since hazard coverage is included.
What is the scope of hazard insurance?
Hazard insurance may cover certain “hazards” like:
- The destruction caused by fire
- Sleet, Snow, Ice
- Lightning, Storm, Wind
- Fire and Smoke
- Burglary, Vandalism
- Trees that have fallen, falling objects
- Vehicles that run into your home
- Detonation, Explosions
What does hazard insurance not cover?
Damage from flooding is normally not covered by Hazard insurance. It is necessary for you to procure a different flood insurance policy for you to indemnify your home.
What does hazard Insurance Cost?
The price you pay for homeowners insurance depends on a number of things like what your home is worth, your policy limits, and your amounts that can be deducted.
Dave Ramsey says the following about home insurance policies:
“Most homeowner’s insurance policies have a minimum of $100,000 in liability coverage. But you should buy at least $300,000—and $500,000 if you can.”
A dependable homeowners insurance policy is your best bet for utmost security against the unforeseen. It is possible to include non-compulsory coverages like flood insurance or even personal umbrella insurance with our customizable policies.
You’ll remit your initial deductible amount when you present a claim for covered losses or damages and you and your insurer concur on a payment. Your first deductible is the amount you remit out of your pocket for damages before your insurer indemnifies the amount that is left. The amount that you’re repaid is dependent on which of the accompanying two repayment stipulations are in your policy:
- Actual cash value – Actual cash value policies, or ACV policies, are the least costly, are more often than not required for older homes, and provide the smallest repayments for damages. You are only repaid for what your home or private property was worth at the point when it was destroyed with actual cash value policy settlements.
- Replacement cost value – Replacement cost value policies are more pricey than ACV, but are the safest path to take in ensuring that you don’t find yourself paying out of your pocket to make up for the decrease in value. Destroyed or stolen properties are replaced at their full price to purchase new by replacement cost settlements, irrespective of deterioration.
At Campion Insurance we would love to help you insure your home whether it is a brand new home you just purchased and your first home insurance policy or you’ve been a homeowner for many years and want to compare your coverage options.
Please give us a call so we can help you go over all of your options and find the best coverage at the best price for your home.
Insurance stipulations, descriptions, and explanations are only meant to inform and do not in any form substitute or change the descriptions and information included in personal insurance agreements, policies, or declaration pages, which are controlling. Such terms and accessibility may differ by state and exclusions may be relevant. Price slashes might not be relevant to every policy coverage.