Questions Personal and Family

What is the difference between hazard insurance and homeowners insurance?

2 Answers Airtract Airtract Date Sorting

Airtract

Elizabeth T Flanagan

Love without limits

Both the hazard insurance and the homeowner's insurance are essential to give the required protection to assets.

Among various types of insurance, hazard insurance and homeowners insurance are two such types which are very important to secure assets.  The coverage types are not too different from each other but have some minute differences. Hazard insurance mainly covers the dangers which may cause serious effect on a residential property. This type of coverage includes the risk caused to the structure of the home due to natural calamity. Natural disasters such as storm, hail, cyclone, etc. can seriously affect the destruction of a house and to remain safe from that; it is necessary to have hazard insurance coverage. This insurance policy covers the house from the disasters caused due to the lightening of fire, damage to hail or explosions, storm, etc. In case of homeowners’ insurance policy, it will be possible to protect the contents within the home along with the entire structure of the house. So it can be said that hazard insurance is must to take along with home insurance. 

The difference between the homeowners’ policy and hazard insurance policy: 

•    Hazard insurance mainly covers disasters caused due to natural calamity, but in case of homeowner’s insurance, it acts as property insurance which covers losses as well as damages to overall property including assets in the home. It offers liability coverage against all accident in the home.

•    Hazard policies never cover contents within the home, but the homeowner’s policy covers damage caused to the belongings within the home too. 

•    Homeowners insurance can cover lots of contents, but the hazard insurance is restricted to certain articles only.

•    If disaster to a house is caused due to blast or explosion, then the risk is covered under hazard insurance. But the homeowner insurance policy is available depending on the type of disaster. 

•    If you are looking for protection to the contents such as garments, books and any other devices inside the home, then homeowners’ policy is the best one. Hazard policy does not cover these contents within the home.

•    Lenders mainly require hazard insurance. If you are planning to have a mortgage loan, then the lenders will need hazard cover so that in case of any accident to the house, the liability can be recovered. Homeowner’s insurance policy is a contract between the parties, and here the beneficiary is required to pay the regular premiums. 

Airtract

John C. Brown

Focus on the good

There are various types of insurance which are now available in the market but 2 of the most important ones are hazard insurance and homeowners insurance. In many cases, people mistook it as one and the same but in reality, there is a slight difference although they are part and parcel of each other. Hazard insurance is the one which offers coverage only for the home structure. While on the other hand, homeowners insurance is designed to protect the insurance owner financially and provides coverage from different categories of damage, mentioned in the policy document, in addition to theft. It takes care of the medical bills if in case someone gets injured at home and cover the legal costs which you may need to bear if the victim sue you, in addition to the cover for the damage which happens due to Fire, Lightning, Windstorms, and Vandalism.

In maximum cases, the mortgage loan lender will ask for the copy of the hazard insurance as a bare minimum requirement to apply for the loan.  Lenders do so because it is one and only part of the main policy of homeowners insurance directly linked to the structure of the home.

Homeowners insurance includes basic liability, besides the hazard coverage. So we can say that the major difference between the two is that hazard insurance is a part of homeowners insurance. Home insurance includes 3 other provisions and they are:

  • Additional living expenses:
    It is the coverage given by the insurance policy in case you are forcefully needed to relocate.
  • Personal liability:
    As mentioned above this coverage is given when someone gets injured at your home and files case against you.
  • Medical payments:
    It’s the coverage given to you when you enter a liability where you need to bear the medical expenses of the injured guest.

  Hope you got an idea about what exactly is the difference between the two insurances.

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