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Hazard Insurance vs Home Insurance: What You Should Know

Hazard Insurance vs Home Insurance: What You Should Know

When purchasing a home or seeking more affordable insurance, you need to understand the difference between a home warranty and home insurance. The other important factor to consider is hazard insurance vs home insurance.

When obtaining home insurance quotes, be aware that 1 out of 40 insured homes suffers hail or wind damage every year. An additional 1 out of 50 suffers freezing or water damage. Other claims include fire, lightning damage, and property damage from theft.

When shopping for cheap home insurance, you must also consider the reputation of home insurance companies and the average home insurance cost. We are going to share what you need to look at when doing cost comparison shopping and how to find the best home insurance to meet your needs.

What Does Hazard Insurance Cover?

Hazard insurance provides coverage for structural damage your home suffers due to natural disasters. Depending on your actual policy, it may cover only damage to the structure but not your personal items. There may be a hazard rider for personal item coverage during a natural disaster.

Here are the natural disasters that fall under hazard insurance coverage:

  • Falling Debris
  • Hail
  • Hurricane
  • Ice and sleet
  • Snowstorms
  • Smoke
  • Tornado
  • Vehicles—automobiles, aircraft, etc

Hazard insurance does not cover flood damage. Depending on your flood damage rating, it may be necessary to purchase flood insurance under the terms of your mortgage.

To find out what your flood insurance needs are, you can use the FEMA flood map tool. Just enter your address and search for flood ratings.

There are also some states, such as Florida, that have special laws regarding damage from a hurricane. In Florida, tropical storms do not have coverage. Storm surges and flash flooding that are the result of hurricanes are not covered.

However, Florida law requires that if the National Hurricane Center declares a storm a hurricane then standard homeowners insurance must cover windstorm damage.

This is why it is important to review exactly what your policy covers. Depending on your location, decide what additional coverage you need to purchase.

For example, if a tornado damages your home, the hazard insurance policy pays for the cost of repairing or rebuilding your home. If a fire blazes through your home, hazard insurance does not cover the structure or belongings. For that, you need a homeowners insurance policy.

Hazard Insurance Premiums

There are several factors that determine the cost of your hazard insurance premium. If your home has a high replacement value or is older, your premiums will be higher.

If you reside in an area that is at high risk for fires, floods, hurricanes, or tornados, you may be paying a higher premium for coverage. Insurance premiums are less costly than suffering a complete loss with no coverage.

Other factors that weigh into the premium cost include the amount of your deductible. Lower deductibles mean less out-of-pocket cost during a disaster but have a higher monthly premium. You also may want to increase the limits of coverage, which will increase the amount of your premium.

What Does Home Insurance Cover?

Not all homeowner’s policies are the same, so read the policy carefully to make sure you understand what is covered. You may need to add riders to the policy to make sure all your belongings and structure are covered under all circumstances.

Most home insurance policies provide coverage in the event of fire, windstorms, hail, lightning, and vandalism. The coverage provides for both the structure and contents of your home.

It also covers liability if someone suffers injuries at your home. It will pay their medical expenses and any legal costs if they sue you.

A good comprehensive homeowners policy will provide coverage for:

  • Dwelling—this covers the structure of your home, including the roof and foundation
  • Liability—if someone suffers injuries and you are found liable, this pays their medical bills and legal fees if they sue you
  • Loss of Use—if you are unable to live in the home during repairs or rebuilding, this pays for alternate housing and restaurant meals
  • Other Structures—detached structures on your property including outbuildings, fencing, and a detached garage
  • Personal Property—repair or replacement of your personal belongings inside the home

Most homeowners insurance policies contain a list of “named perils” that have coverage if the damage is from specific disasters or hazards. This often includes sixteen unusual events including an explosion, theft, or a riot. Other damages from plumbing, air conditioning, or heating systems, or a household appliance may have coverage.

Items Not Covered

Your policy will likely include a list of items that do not have coverage. The extensive list of exclusions will include items such as mold, power failure, neglect, smoke, animals, infestation, and collapse.

You will want to see if the area where you live excludes coverage for specific items. For instance, if you live in a tornado belt you may need to purchase additional tornado coverage for the home. Other hazards that may require a separate hazard policy include earthquakes, floods, and sewer insurance.

Homeowners Insurance Premiums

Like hazard insurance, the cost of your standard homeowners' insurance will depend on a variety of factors. This includes:

  • Type of home—brick, stucco, wood, stone
  • Age of home
  • Type of roof—slate, metal, or composite shingle
  • Square footage of home
  • Location of home
  • Safety features—smoke detectors, fire extinguishers, alarm system
  • Distance to the nearest fire hydrant
  • Your homeowners' insurance claims history
  • Your credit history
  • Any gaps in insurance coverage

Every insurance provider develops its own set of criteria for evaluating homes and determining rates. That is why it is always beneficial to do a price comparison that makes choosing cheap and effective insurance easy.

Hazard Insurance vs Home Insurance

If you are trying to weigh your options on purchasing hazard insurance vs home insurance, compare coverage and cost from several providers. This can easily be done by using Quotelab. Simply enter your zip code to receive a quote.

If you have any questions feel free to contact us by calling (855) 786-8352 or using our online form.