Hazard insurance for homeowners
By Allstate
Last updated: June 2022
What is hazard insurance?
Hazard insurance is a term sometimes used to describe the coverages that homeowners insurance provides for certain risks, according to the Consumer Financial Protection Bureau (CFPB). If you hear someone mention hazard insurance, they are likely referring to a homeowners insurance policy. Some common examples of hazards (also referred to as perils) that are typically covered by homeowners insurance include fire, theft and vandalism, among others.
If you have a mortgage, lenders usually require proof that you have a homeowners insurance policy to help pay to repair damage caused by those hazards, says the CFPB.
What does hazard insurance typically cover?
Homeowners insurance typically helps cover damage from hazards such as:
- Fire and smoke
- Wind
- Hail
- Explosions
- Theft
- Vandalism
- Falling objects
- Damage caused by the weight of snow, sleet or ice
- Water damage caused by a household appliance or burst pipe
- Power surges
- Civil unrest or riot
It's important to remember that not all insurance policies are the same. Be sure to read your policy or check with your insurance provider to learn what risks may or may not be covered by your policy. For example, damage caused by floods and earthquakes are typically not covered by homeowners insurance.
3 home insurance coverages that protect against hazards
Homeowners insurance generally includes three types of coverage that help protect your home, other structures on your property and your belongings. Here's an overview of how a typical homeowners insurance policy may help protect you from perils such as the ones listed above.
Dwelling coverage.
The physical structure of a home is protected by dwelling coverage. For instance, if fire damages your walls or hail dents your siding, this coverage may help pay for repairs.
Other structures coverage.
Homeowners insurance typically extends to structures other than an actual home. If you have a fence, shed or detached garage on your property, you may find insurance will help pay to repair or replace them after a covered loss.
Personal property coverage.
Personal property is a term used to describe your belongings. Think about all of the items you own: your clothes, electronics and housewares, for example. All of those items are considered personal property. Suppose your television is stolen or your furniture is damaged by a fire in your home. This coverage may help pay to replace items damaged or destroyed by a fire and certain other perils.
Deductibles and limits
When a covered hazard, such as fire or theft, prompts you to file a homeowners insurance claim, you may have to pay a deductible, which is the amount of money you have to pay out of pocket before your insurance company begins to help pay for a claim. The deductible for each coverage in your homeowners policy is stated in your policy declarations.
It's also important to understand that each coverage has a limit, which is the maximum amount your insurer will pay toward a covered loss. Any expenses beyond your coverage limit are your responsibility. Your insurance provider can help you raise or lower your coverage limits to suit your needs.
How much is hazard insurance?
The amount that you'll pay for hazard insurance — which, again, refers to the homeowners insurance coverages that help pay to repair damage caused by certain risks — depends on a number of factors. For instance, the deductibles and limits you select, as well as the types of coverage in your policy are among the factors that help determine the cost of homeowners insurance.