Do I Need Hazard Insurance?

Posted October 13th, 2010
by HomeownersInsurance.org Staff (no comments)

A typical homeowners insurance policy won’t necessarily cover all the different events that could cause damage to your property. While most policies cover fire, wind, and severe storm damage, certain areas are more prone to different kinds of natural disasters, and the more likely the damage from a specific type of event, the less likely it is that your homeowners insurance policy will cover it.

  • Know your exclusions. Most policies come with certain exclusions, meaning the policy won’t pay out for certain things. Many insurers are now excluding dog bites, for instance, because of the rise in both the number and expense of dog bite claims. But your insurer may exclude other types of damage based on the risk. If the risk is very high in your area, chances are the damage will not be covered.
  • Know the area. If you’ve lived in the area all your life, you probably already know what risks there are. Midwestern homeowners experience a higher likelihood of tornadoes, while Floridians are at risk of hurricane damage. Homes in California often need earthquake insurance, but houses in other areas could also be at risk. If you are new to the area, ask your neighbors about their homeowners insurance policies to get a feel for what is usually covered. This can also be a great way to find a good insurance company.
  • Hazard insurance is not liability coverage. While homeowners insurance typically covers both property damage and liability for accidents, hazard insurance does not. Instead, it covers property damage that results from specific events such as fire, wind, storm, or other natural disasters, depending on what is specified in the policy.
  • Be sure to ask. Your insurance sales agent is your best bet for determining what is covered by your policy and what is not. You can also review your policy to see what is and is not covered.
  • Flood zones. If you live in an area at high risk of flooding, your lender is required by law to force you to buy flood insurance. Areas that are at elevated risk for other disasters or weather events may not have the same rules. If your policy excludes damage from wind or severe storms, you should look into buying hazard insurance that covers it.

The best way to be sure you are covered in the event of vandalism, fire, flood, earthquake, or windstorm is to review your policy. If there are exclusions for any of these types of events, you probably can (and should) look for hazard insurance separately.

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