What Is Home Hazard Insurance and What Does It Cover?
Understand what home hazard insurance entails, its protections, limitations, and how it integrates with your homeowners policy.
Home hazard insurance refers to coverage that safeguards a home’s physical structure from various unforeseen events. This type of insurance is a common requirement for property owners, particularly those with a mortgage, as it provides a financial safety net against potential damage to the dwelling itself.
What Home Hazard Insurance Covers
Home hazard insurance provides financial protection for the physical structure of a dwelling against specific events, often called perils. Common perils covered include damage from fire and smoke, lightning strikes, explosions, windstorms, and hail.
Coverage also includes protection against theft and vandalism. Damage from falling objects, the weight of ice, snow, or sleet are standard inclusions. Additionally, certain types of sudden and accidental water damage, like that from burst pipes or malfunctioning household appliances, are covered.
What Home Hazard Insurance Does Not Cover
While comprehensive, home hazard insurance does not cover all types of damage. Standard policies exclude damage from natural floods, requiring a separate flood insurance policy. Earth movements, such as earthquakes, landslides, and sinkholes, are also excluded and necessitate specialized coverage.
Damage from neglect, wear and tear, or intentional acts is not covered. Infestations by pests like termites or rodents, and issues like mold growth, are considered maintenance responsibilities and are excluded from standard hazard policies. Certain types of water damage, such as sewer backups or sump pump overflows, may be excluded unless a specific endorsement is added.
Relation to Homeowners Insurance
“Home hazard insurance” is not a standalone policy. It is an informal term used, especially by mortgage lenders, to refer to the dwelling coverage component (often called Coverage A) within a broader homeowners insurance policy. Mortgage lenders often require this specific coverage to protect their investment in the property.
A standard homeowners insurance policy is more comprehensive, encompassing several other coverages beyond just the dwelling. These include personal property coverage, which protects belongings inside the home. Homeowners policies also include liability coverage for injuries or damages to others on the property, and additional living expenses coverage, which helps with costs if the home becomes uninhabitable due to a covered loss.
Factors Affecting Cost
The cost of home hazard insurance, as part of a homeowners policy, is influenced by several factors. The home’s location plays a significant role, with premiums varying based on local weather risks, crime rates, and proximity to emergency services. The age and construction materials of the home also impact cost, as older homes or certain materials may present higher risks.
Other factors include the chosen deductible amount, where a higher deductible leads to a lower premium. A homeowner’s claims history can also affect rates, as frequent past claims may indicate a higher future risk. The presence of safety features, such as alarm systems or sprinkler systems, can lead to reduced premiums.