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At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. When it comes to insuring your home — which is often the largest single financial investment you’ll make — you’ll want to make sure you have the right coverage for your home. If you’re in the midst of shopping around for , the term may come up as part of the coverage discussions. But how are homeowners insurance and hazard insurance related, and are they the same thing? If this question has been on your mind, the good news is that the distinction is fairly simple between the two coverage types. Compare rates and save on home insurance today! Get quotes Close X This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare home insurance rates
Answer a few questions to see personalized rates from top carriers. Continue Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Quick Facts $382/year average savings through Bankrate 2 out of 3 homes are underinsured 1 out of every 20 insured homes makes a claim each year 100% of homes need insurance before getting a mortgage Bankrate See more providers in Choose from insurers in Show More Mortgage Leaving so soon Your custom quotes are just minutes away
Return to form This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare home insurance rates
Answer a few questions to see personalized rates from top carriers. Continue Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. Quick Facts $382/year average savings through Bankrate 2 out of 3 homes are underinsured 1 out of every 20 insured homes makes a claim each year 100% of homes need insurance before getting a mortgage Bankrate See more providers in Choose from insurers in Show More Mortgage Leaving so soon Your custom quotes are just minutes away
Return to form Is homeowners insurance the same as hazard insurance
No, hazard insurance is not the same thing as homeowners insurance, but it is part of your homeowners insurance policy. To put it simply, is not a separate policy you need to purchase; it is a component of your homeowners insurance policy. As such, it’s not an interchangeable term with homeowners insurance. If anything, hazard insurance is interchangeable with because it refers to a list of perils that your homeowners policy insures your home against. As such, you might hear lenders using the term “hazard insurance” during your discussions about homeowners insurance policies, as these types of perils are the lender’s main concern. Homeowners insurance
Homeowners insurance consists of a collection of coverage types that work to insure different aspects of your home. In addition to dwelling coverage, your homeowners insurance can cover detached structures, like a swimming pool or a detached garage, your personal property and more. Common coverages that are included in standard homeowners insurance policies include: Dwelling coverage: Dwelling coverage protects your actual home— meaning its foundation, roof, walls, windows — effectively, whatever does not fall out if your house was turned upside down. Loss of use coverage: If you are forced to live somewhere else after a covered peril, loss of use coverage will cover your additional living expenses up to a certain limit. Other structures coverage: Have detached structures on your property? The other structures portion of your policy protects unattached things like a shed, greenhouse or fence. Medical payments coverage: If a guest is injured at your home, this coverage will pay their medical expenses, up to predetermined limits. Personal liability coverage: If you are sued because someone is injured at your home, personal liability coverage covers your court expenses, up to limits. Personal property coverage: Covers lost, damaged, or stolen personal property you have in your home if the cause of loss is a covered peril. Hazard insurance
Hazard insurance is not a separate policy from your homeowners insurance. It is simply the perils your homeowners insurance protects against. When it comes to this aspect of your policy, there are two types you have to choose from: named perils and open perils. A named perils policy protects your home against 16 specific . Those perils are: Electrical current Explosions Falling aircraft/objects Fire Freezing of A/C or heating systems Hail Lightning Overflow of water or steam Riots Smoke Theft Vandalism Vehicles Volcano eruptions Weight of ice or snow Windstorms Any peril not listed above is not covered in a standard named peril policy. However, this is a pretty extensive list and works for many homeowners. An open peril policy protects against every peril you can think of, except for these common exclusions: Collapse of internal structures Discharge of pollutants Earth movement Government intervention/ action Intentional damage by owner or inhabitants Mechanical breakdown Mold, wet rot, or fungus Neglect Normal wear and tear Nuclear fallout Ordinance of law Pets Power failure Some types of water damage Smog, corrosion, or rust Smoke from nearby industries Theft during construction Vandalism while vacant War Wildlife/ vermin Though it may seem like an open perils policy has more exclusions than inclusions, it actually protects against far more items than a named policy. It is for this reason that an open perils . There are eight categories of homeowners insurance policies offered by most providers to choose from, and each either has a named perils approach or an open perils approach. HO-1 (though it only protects against 10 named perils), HO-2, HO-4, HO-6, HO-7, and HO-8 all adopt the named perils approach to hazard insurance, while HO-3 and HO-5 are the only ones that use open perils. The most common type of homeowners insurance sold in the United States is an HO-3 policy. It covers your home, medical payments, personal property, liability, as well as additional living expenses. SHARE: Lauren Ward has nearly 10 years of experience in writing for insurance domains such as Bankrate, The Simple Dollar, and Reviews.com. She covers auto, homeowners, life insurance, and other topics in the personal finance industry. Angelica Leicht is an insurance editor on the Bankrate team. She is truly passionate about helping readers make well-informed decisions for their wallets, whether the goal is to find the right comprehensive auto policy or the best life insurance policy for their needs. Related Articles