What Is Hazard Insurance?

If the unexpected happens and your home needs costly repairs, you’ll be glad you were proactive about protection. Hazard insurance offers a financial safety net in the event you have to deal with sudden damages to your humble abode. Let’s take a look at how hazard insurance helps you get back on track after a loss.

Is Hazard Insurance the Same as Homeowners Insurance?

If you’re a homeowner, you might already be familiar with hazard insurance — but you probably just call it homeowners insurance! Because even though the term hazard insurance is commonly thought of as a separate type of coverage from a homeowners insurance policy, what it’s actually referring to is the portion of your homeowners insurance that protects you against a number of perils. It’s not its own separate policy but rather it’s the foundation of your home insurance policy.

What Does Hazard Insurance Cover?

The reason homeowners insurance may be referred to as hazard insurance is because your home insurance is designed to protect you from a number of hazards. In the insurance world, these are called perils. A peril is the specific risk or cause of a loss covered by your insurance policy. For example, your homeowners policy typically covers you for the following perils:

  • Fire
  • Smoke
  • Hail
  • Wind, including tornadoes
  • Lightning, theft and vandalism
  • Falling objects, like rocks or trees
  • Weight of ice, snow or sleet
  • Wildfire
  • Frozen interior plumbing
  • Riots or civil commotions
  • Vehicles and aircrafts

It’s important to note that your homeowners insurance doesn’t cover flood or earthquake damage. So if you live in areas prone to these types of hazards, you’ll need to purchase protection for these perils separately from your home insurance. At American Family Insurance, we offer flood insurance through the National Flood Insurance Program — keeping you protected from your rooftop to your basement, and everywhere in between. We also offer earthquake insurance to add on to your existing home policy, giving you peace of mind in times of uncertainty.

Choosing the Right Hazard Insurance Coverage

Whether you’re required to have it because you have a mortgage or you have it because it’s a smart financial move (or both!), you purchase hazard insurance as a way to protect you financially in the event of the unexpected. But, as great as having hazard insurance can be in times of need, it’s important you know the ways your standard policy protects you — and even more importantly, the ways it doesn’t protect you.

Consider the following questions:

Do you have a finished basement? If so, do you have sump pump coverage? A sump pump is designed to remove excess water that accumulates in and around your home, and if the system ever fails or the power goes out, you might be left to deal with a wet mess and damage to your personal property.

Damage from an instance like this isn’t covered by your standard homeowners insurance. But sump pump overflow coverage gives you added protection to put your mind at ease.

What are the limits on your policy for jewelry coverage? While most homeowners policies cover your jewelry, keep in mind that coverage is limited. In fact, your homeowners insurance only covers between $1,000 to $2,000 total for all of your jewelry combined. So if your jewelry is valued at more than your personal property limit, it’s a good idea to increase your coverage limit or itemize specific jewelry items, which, in addition to providing higher dollar amounts of coverage, also provides coverage for a broader range of losses. For example, if you itemize your engagement ring, it’ll even be covered if you accidentally lose it! Find out more about jewelry insurance with American Family.

Do you have any detached structures on your property? A swimming pool, gazebo, shed, detached garage — do you have anything like this on your property? These are considered detached structures, or other structures, and are not covered by your hazard insurance unless you specifically add other structures coverage to your home insurance policy. Keep reading to learn more about detached structures on homeowners insurance.

Do you have the funds saved in case you need to replace your roof following hail damage? One of the most common causes of damage to roofs is hail. If your roof needs to be repaired or replaced after a hail storm, your home insurance will kick in to help cover the cost — but how much it’ll cover depends on what kind of coverage you have.

If you only have actual cash value coverage for roof repair or replacement, you’ll receive an amount equivalent to what your roof is worth today, taking into consideration things such as its age, condition and type of roofing material — leaving you to potentially pay out of pocket to cover the rest. However, if you have replacement cost value coverage, you’ll be covered for the amount it would cost to replace your roof, and typically you won’t need to pay any money out of pocket to repair or replace your roof. Though, either coverage will require a deductible before insurance steps in.

Find the Right Hazard Insurance for Your Home

There’s a lot to understand about homeowners insurance and to really feel confident in your coverage, it’s important you know you have the right protection in place — that’s where an American Family agent can help. They’ll work with you to build a customized policy that matches your needs, so you gain peace of mind that you’re protecting what matters most. Connect with your agent today.


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Related Topics: Insurance Needs