Flooding, wildfires, and storms can cause significant damage to your home. Here is a breakdown of the different types of hazard insurance, and what they do and don’t cover.
- You can't prevent your home or personal property from being devastated by natural or man-made disaster. Hazard insurance protects the homeowner against the risk of damage to or loss of their home and property. Very often, mortgage lenders require that home buyers also purchase some forms of hazard insurance. You don't need to own a home to get insurance to protect your home and personal property. It's also available to those who are renters, temporary tenants, and owners of residential condominium units.
There are different types of hazard insurance-- basic homeowners insurance, comprehensive homeowners insurance, and specific hazard insurance. They differ in which risks or hazards are covered.
Basic homeowners insurance covers damage to the home. Comprehensive homeowners insurance covers the home, the real property, and the personal property in it, as well as adjacent structures like a garage, and also provides liability insurance in case somebody is injured on the property. What's not included? Things like natural disaster risks, such as floods or earthquake damage. But specific hazard coverage may be added to a basic or comprehensive policy for those risks.
Standard homeowners insurance also excludes damage due to work needed to bring your house up to code, any government action, power failures and water damage, earth movement or explosion from any source, and damages from war and nuclear hazard. It also excludes damages caused by neglect and natural disasters no one could have prevented, such as a tsunami, volcanic eruption, wildfire, tornado, or hurricane.
Check with your state insurance department or with the National Association of Insurance Commissioners to help you choose an insurer in your area and to get a complete history. Stay financially fit, friends!