If you’re shopping for homeowners insurance, you’ve probably come across many different terms. But it’s important to understand the subtle differences between different types of coverage before you commit to a policy, given that a home is one of the most significant investments you can make. A question that may arise during the research phase is, is whether hazard insurance is the same as home insurance? The answer is slightly complex. Read on to learn more.
What is hazard insurance?
Hazard insurance and homeowners insurance are not separate coverage types. Hazard insurance generally refers to coverage for the structure of your home only. It may cover “hazards” such as fire damage, hail damage, theft, vandalism, and more. Other kinds of damage will be covered by other coverages within your home insurance policy. Hazard insurance doesn’t generally refer to the coverage that protects you for injuries incurred by you or your guests following an accident may be covered by liability coverage.
The reason ‘hazard insurance’ is a common term is actually because of lenders. Your mortgage loan provider may require hazard insurance at minimum before they will issue you a loan, because that is the only portion of the homeowners insurance policy directly related to the home structure itself. This may create the misconception that hazard coverage can be purchased separately from homeowners insurance, which is generally not accurate. If your lender has specified that you need hazard or dwelling coverage, just know that generally purchasing a homeowners policy will satisfy their requirements.
How much is hazard insurance?
How much you pay for homeowners insurance depend on a variety of factors, including the value of your home, your policy limits and your deductible amount. Learn more about how home insurance costs are calculated.
For maximum protection against the unexpected, a reliable homeowners insurance policy is the way to go. With Nationwide’s customizable policies, you can also add optional coverages like flood insurance or even personal umbrella insurance.