Hazard Insurance

One of the most important assets a person could have is having a house that can be called a home. People invest for a house to live in. A part of this investment, a homeowner would also secure an insurance to protect his house in case of inevitable circumstances. There are different types of homeowner insurance one can avail. One of these types is Hazard Insurance.

While we are busy transforming our house to a comfortable home, there are certain instances that we can’t avoid. Hazard insurance is provided to protect us from this certain events. Hazard insurance is a property insurance that covers specific natural hazards such as storms, fire and vandalism. Sometimes earthquakes and floods are not included. However, you should be noted that hazard insurance is different from homeowner’s insurance. Hazard insurance usually covers physical damages that are named specifically while the homeowner’s insurance policy is a combination of both liability insurance and hazard insurance.

In case of mortgage, the lender would typically require buyers to avail a hazard insurance to protect their investment. The term for this insurance is may change from hazard insurance to property insurance to comprehensive homeowner’s insurance but all of these would mean the same thing to the lender and the attorney. Lenders would always impose to their buyers to avail at least minimum comprehensive hazard insurance to cover whatever that may occur on the mortgage. This will help in the expenses of the mortgage back to its restoration once the property is damaged due to a strong typhoon after the sale is completed. The lender may incorporate the payment of the insurance to your monthly mortgage payment.

As a policy holder, it would be best for you to ask your insurance broker about your insurance policy’s coverage before signing for the contract. Some of these insurance companies offers comprehensive insurance policies that will include the coverage of these hazards so an add –on of a hazard insurance might not be necessary at all. Comprehensive home insurance and home insurance should complement each other to fill the gaps of coverage. But between the two, comprehensive home insurance has a bigger coverage. This includes the coverage of damages of one’s house and structures, personal property and belongings of the insured, other structures like the garage, personal liability and medical payments of any guest at the insured’s property regardless of whose fault. Hence, if you would still resort to have a hazard insurance that would best cater your needs, you still have an option to purchase additional features on your insurance by asking your insurance provider.

You might wonder about the premiums of this kind of insurance. Basically, hazard insurance premiums are calculated based on the appraised value of the property, the construction method, the known natural hazards in the area and the age if the building. Though insurance companies’ offers additional hazard insurance features in the policy such as hurricane coverage and flood, homeowners would still consider on how policies with high premiums benefit them.