Hazard Insurance

Part of your homeowners insurance policy, hazard insurance protects the structure of your home against “hazards” like fire, hail, theft, etc.

Hazard insurance definition

If you find yourself asking, ‘what is hazard insurance?’, rest assured that it’s exactly as it sounds: it’s insurance that protects your home against, well, hazards!

Insurance nerds (like us!) see “hazards” as things that increase the chances of something bad happening – but mortgage companies talk about ‘em differently (and, chances are, if you’re here, they asked you to get mortgage insurance!).

So what are hazards in mortgage speak, exactly? Things like:

  • Wildfires
  • Explosion
  • Burst pipes
  • Vandalism
  • Sinkholes
  • Earthquakes
  • Floods

A couple things to note here – First off, not all of the perils listed above are covered under your base homeowners or condo insurance policy. Typically, you’ll have to purchase separate flood insurance from the National Flood Insurance Program, as well as separate earthquake insurance.

(Btw, at Lemonade, we offer Earthquake insurance through our partners, Palomar! Just takes a few minutes to add it on.)

Second, take note that hazard insurance covers your home structure only, not the stuff inside it. Think of it this way: if you turned your house upside down, everything that would fall is not covered by hazard insurance. But fear not – your stuff, (aka, ‘personal property’ in insurance speak) is covered by homeowners insurance, under your personal property coverage.

Hazard insurance vs homeowners insurance

Debunking the myths here, hazard insurance isn’t separate from your homeowners insurance or condo insurance policy! Rather, it’s a section of your homeowners insurance policy that covers damages to your home by hazards.

Other kinds of damages, such as damage to your stuff or injuries incurred your guests or others, is included in separate coverages in your homeowners policy.

So why do people think that hazard insurance is separate? Well, your mortgage loan provider might specifically ask you to get hazard insurance. Why? It’s just what they call it – we know, it’s confusing!

So if you’re asking yourself, ‘do I need hazard insurance if I have homeowners insurance?’, rest assured that if you have homeowners insurance coverage, it’ll typically be enough to satisfy your lender. And if it doesn’t, go ahead and purchase a separate flood insurance or earthquake insurance policy.