If you are purchasing a home or have already purchased a home, you are probably familiar with homeowners insurance. What may not be as familiar is hazard insurance which is coverage that protects property against damage caused by fires, storms, hail/sleet, or other natural events. Your company will cover the details of your policy but they generally cover the cost of any damage incurred as long as the weather event is covered in the policy.
You may not be familiar with hazard insurance, but you may have heard the term catastrophe insurance. They are often considered the same as they both deal with large natural disasters otherwise known as “acts of God”, although they are technically not the same. In regard to hazard insurance, it typically refers to the part of a general homeowners insurance policy that protects the structure while catastrophe insurance typically covers specific types of disaster including man-made disasters.
It’s important to remember that many mortgage lenders require you to have homeowners insurance in order to get hazard insurance and in areas that are high risk you may need to take out additional hazard insurance for specific situations.
Hazard insurance protects homeowners against damage caused by varying types of natural disasters like fire or lightning, for example. Hazard coverage is typically a part of the owner’s main property and other structures that are in the area like a garage. It’s important to discuss your specific policy with your company that handles your insurance so they can make sure you are covered in any circumstance that might affect your home.
When it comes to the amount of hazard insurance that you will need, that is contingent on the amount needed to replace the home in the event of a total loss. This amount may change depending on the current market and the current property value, but since policies are renewable and written for one year this shouldn’t be too much of an issue.
Hazard Insurance and Mortgages
It’s a good idea to keep your home protected and the best way to do that is to bulk up your policy. When it comes to hazard insurance, it’s better to pay the extra costs upfront than to deal with them out of pocket. As weather changes and drastic weather events become more and more common due to climate change, it may become even more necessary than previously for homeowners to have increased hazard insurance.
In most cases when you are taking out a mortgage, you will be required to take out a homeowners insurance policy. They will usually want you to have hazard insurance since it’s related to the structure of the home and not the property. When you buy a home, a general policy will satisfy the lender’s requirement but a more expensive home may require more coverage.
Reach Out Today!
Depending on where you live, you may need a separate hazard insurance policy to make sure property is protected. We can help you determine the best policy for you so don’t wait to reach out to the team at Willoughby Insurance in Buffalo, NY today!