Hazard Insurance Vs Home Insurance 2023: Are They The Same?

Home insurance protects your residence and certain belongings from things out of your control. Hazard insurance, on the other hand, adds an extra layer of protection.

Let’s give you a match, Hazard insurance vs Home insurance. This article explains in detail all you need to know about homeowners insurance and hazard insurance. Carefully read through.

What Is Homeowners Insurance?

Homeowners insurance is a type of property insurance that covers losses and damages to an individual’s residence, along with furnishings and other assets in the home. This type of insurance provides liability coverage against accidents in the home or on the property.

Homeowners insurance can help you fix or replace your home and belongings in the event of a fire, theft, or another similar circumstance. This coverage may also prevent you from breaking the bank or obtaining loans if a visitor were injured at your home.

Home Insurance Coverage

According to the Insurance Information Institute, standard home insurance policies covers the following:

  • Damage from an aircraft, car, or vehicle
  • Explosions
  • Falling objects
  • Fire and smoke
  • Lightning strikes
  • Riots or civil commotion
  • Theft
  • Vandalism and malicious mischief
  • Volcanic eruptions
  • Water damage (from within the home only)
  • Weight of ice, snow, and sleet
  • Windstorms and hail

The cost of homeowners insurance solely depends on the amount of coverage you select. Keep in mind that more coverage and increased coverage limits translate to a higher cost. Certain valuables and features of your home can raise the price of your policy as well.

What Isn’t Covered by Home Insurance?

While most scenarios where a loss could occur are covered by homeowner’s insurance, some events are often excluded from policies, such as natural disasters or other “acts of God,” as well as acts of war.

For those that live in a flood or hurricane area or an area with a history of earthquakes, you’ll need riders for these or an extra policy for earthquake insurance or flood insurance. You can also get sewer and drain backup coverage, and even identity recovery coverage that reimburses you for expenses related to being a victim of identity theft.

What Is Hazard Insurance?

According to Policygenius, hazard insurance is defined as “the specific portion of your homeowners’ insurance policy that protects your home from perils covered in your policy.”

Hazard insurance protects property owners from damage caused by fires, strong storms, hail/sleet, and other natural disasters. The property owner will get compensation to cover the cost of any damage sustained as long as the specific weather event is covered under the policy.

Forbes states further that Hazard insurance also known as dwelling coverage covers the structure of the house. It is a subsection of your homeowner’s insurance, and not a separate policy.

What Does Hazard Insurance Cover?

Everything from fire and lightning to hail and theft is covered by hazard insurance. This form of insurance should cover the damage to your home if it is ever vandalized. The same is true if your HVAC system freezes or if severe snowfall damages your roof.

Here are 16 hazards (perils) commonly covered by hazard insurance:

  • Fire and lightning
  • Windstorm and hail
  • Volcanic eruption
  • Explosion
  • Smoke
  • Weight of ice and snow
  • Riots
  • Aircraft
  • Vehicles
  • Vandalism
  • Theft
  • Falling objects
  • Accidental overflow of water from household appliances or heating, plumbing, air conditioning systems or sprinkler systems that put out fires
  • Freezing of household appliances or heating, plumbing, air conditioning systems or sprinkler systems that put out fires
  • Accidental cracking, burning, tearing of heating, plumbing, air conditioning systems or sprinkler systems that put out fires
  • Accidental damage due to short-circuiting of an electrical current

Hazard insurance requirements can differ by lender and by location. For example, while wind damage is usually covered by homeowners insurance, in some coastal areas it may be removed from a home insurance policy. If your hazard insurance excludes windstorm damage or your lender requires it, you will have to buy a separate windstorm policy.

What Doesn’t Hazard Insurance Cover?

Hazard insurance usually doesn’t cover damage from flooding. Therefore, you will need to purchase a separate flood insurance policy to cover your home.

There are other things not covered by hazard insurance, such as:

  • Damage to or theft of your personal property
  • Injuries that occur on your property
  • Mold damage
  • Damage from a flood or earthquake

How Much Is Hazard Insurance?

The cost of homeowners insurance is determined by a number of factors, including the value of your house, policy limits, and the amount of your deductible. For maximum protection against the unexpected, a reliable homeowners insurance policy is the way to go.

According to Forbes, hazard insurance is just one part of a homeowners insurance policy, and typically the cost isn’t broken out by coverage type. Moreso, Forbes Advisor found a national average home insurance rate of $1,854 a year. That’s for a policy with $300,000 in dwelling coverage.

Is Hazard Insurance Deductible?

Hazard insurance premiums can quickly mount up. These premiums, unfortunately, are not tax-deductible. However, there are a few exceptions worth investigating.

According to Clever Real Estate, you can deduct this expense if you have a rental property, home office, or are facing a disaster situation. Nonetheless, there are other ways to reduce your tax liability as a homeowner. You can talk to a tax professional for additional guidance. 

Homeowners Insurance Vs Hazard Insurance

Hazard insurance is actually a part of your homeowner’s insurance policy. Because it represents one aspect of your policy, the two terms cannot be used interchangeably. For this reason, it is also not a separate policy you have to purchase.

In other words, you already have hazard insurance if you have homeowners insurance.

Homeowners insurance is designed to assist you in repairing or replacing your house if it is damaged by a covered risk. The list of perils that your homeowner’s insurance policy protects against is known as “hazard insurance.”

Notable Differences Between Hazard Insurance And Homeowners Insurance

  • Hazard insurance is not a separate policy from homeowners insurance
  • Homeowners insurance protects against common perils (aka hazards)
  • Your policy is either an open perils policy or a named perils policy
  • Your policy is either an RCV policy (replacement cash value) or an ACV policy (actual cash value)
  • Most homeowners have an HO-3 policy, which is an open perils policy

Final Thoughts

Hazard insurance is part of a homeowners insurance policy – it is not a separate coverage type. Hazard insurance is essential to keeping you, your family, and your house safe.


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