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In order to get a mortgage loan for your new home, you need to have a certain amount of hazard insurance included in your homeowners insurance coverage. Hazard insurance is part of a homeowners insurance policy - it is not a separate coverage type. Hazard insurance is essential to keeping you, your family, and your house safe.

What is hazard insurance?

Hazard insurance generally refers to coverage for the structure of your home only. Other kinds of damage will be covered by other coverages within your homeowners 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 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.

What does hazard insurance cover?

Hazard insurance may cover “hazards” such as:

  • Fire damage
  • If a fire damages your home, hazard insurance should cover it. If the damage is bad enough that you need to vacate your home, you’ll also need loss of use coverage to pay for lodgings and any other associated costs.

  • Hail
  • People tend to associate hail-related damage with vehicles, but it can damage homes too. If it damages yours, hazard insurance should cover it.

  • Lightning
  • You might think more about water damage when it comes to storms, but lightning strikes can cause plenty of damage too. Fortunately, damage caused by lightning is usually covered by hazard insurance.

  • Damage
  • Damage can find your home in a multitude of ways. Many of these are covered by hazard insurance, but others require separate policies.

  • Theft
  • Damage done to the structure of your home during a theft may be covered by hazard insurance. Your homeowners policy will also generally protect the possessions in your home against theft.

  • Vandalism
  • If your home is damaged by vandalism, hazard insurance may cover the costs.

  • Fallen trees
  • Damages to your home’s structure caused by fallen trees may be covered by your hazard insurance.

  • Vehicles that run into your home
  • A vehicle running into your home can cause serious structural damage. Hazard insurance may cover the costs of repairing it.

  • Explosions
  • Explosions, usually the result of gas leaks, can cause massive structural damage to homes. Fortunately, damage resulting from an explosion is usually covered by hazard insurance.

What doesn't hazard insurance cover?

Hazard insurance typically doesn’t cover damage from flooding. You will need to purchase a separate flood insurance policy to cover your home.

How much is hazard insurance?

How much you pay for homeowners insurance depends 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.

Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply. Discounts may not be applied to all policy coverages.

Do you need hazard insurance?

A better question might be, “do you own a home?” If you do, then yes, you absolutely need hazard insurance! No one plans to have a gas explosion or fallen tree take out a chunk of their home, but the reality is these things happen. And when they do, every homeowner should be prepared. Get a free quote for homeowners insurance from Nationwide today and learn how a homeowners policy with hazard insurance can better protect you and the things you care about most.
The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Nationwide Mutual Insurance Company, its affiliates and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.