Hazard Insurance Overview

Hazard insurance covers replacement costs for damages caused by fire, wind or disaster that might affect thevalue of the home. Hazard insurance also includes liability and theft coverage.

Hazard Insurance

A hazard insurance policy is a package policy that combines more than one type of insurance coverage in a single policy.

There are four types of coverages that are contained in the homeowners policy:

dwelling and personal property,

personal liability,

medical payments, and

additional living expenses.

The hazard insurance policy protects you from damage or loss to your home or the property in it.

Flood or Quake Insurance

Additional hazard insurance policy coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA).

Remember that flood insurance and earthquake damage are not covered by a standard hazard insurance policy. If you buy a house in a flood-prone area, you’ll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at www.fema.gov.

A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area.

Hope this hazard insurance policy overview has helped you understand what is needed when buying a home.

Good Luck!

Author: Rob K. Blake
Published January 19, 2008
Modified January 20, 2008