Nick Sadek Sotheby's International Realty
Kelly Okimoto, Nick Sadek Sotheby's International RealtyPhone: (916) 335-3185
Email: [email protected]

Understanding hazard insurance

by Kelly Okimoto 11/04/2024

Hazard insurance and homeowners insurance are often mistaken for the same thing due to the similarities they share. While standard homeowners insurance policies include hazard coverage, standalone hazard insurance serves a different purpose.

How do you know if you need hazard insurance? Here is a guide to help you understand the basics:

Hazard insurance vs. homeowners insurance

Hazard insurance can protect you financially from damage caused by hazards like fire, lighting, wind and other natural events. While homeowners insurance includes protection from a broad range of hazards, certain specific events are excluded.

In certain areas where specific hazards like tornadoes or earthquakes are common, you may be required to get a separate hazard insurance policy. This combined with your regular homeowners insurance coverage means you’re prepared for anything.

Another key point of comparison of what these two types of insurance will pay to replace. Hazard insurance typically refers to coverage for the structure of your home, including the roof and foundation. Homeowners insurance, however, includes coverage for your personal belongings and furnishings.

How to know if you need hazard insurance

Whether you should have additional hazard insurance largely depends on where you live. In regions prone to flooding, for example, your mortgage lender might require you to get a flood insurance policy before approving you for a loan.

Even if not required, having hazard insurance coverage can give you peace of mind. If you have an additional hazard policy, you’ll know you have financial coverage if your home and belongings are damaged in an extreme weather event.

By comparing the hazard insurance cost with the potential cost of replacement and repairs, you can determine whether it makes sense to add it into your budget. Consult your insurance company to find out what options you have and whether a hazard insurance policy is right for you.

About the Author
Author

Kelly Okimoto

Professional Real Estate Agent serving and educating the Sacramento area in home buying and selling. When selling a home, I can make your home attractive to its ideal audience - which can make all the difference for some home buyers. Things like staging the home, making repairs and minor improvements can make all the difference. When buying a home, you need someone who knows this area inside and out. I will be your advocate and work with you to find the right home at the right price for you. We'll work together to find a home in the neighborhood you want, with the amenities that matter to you. I'm passionate about working with the community, from supporting youth and homelessness programs, to bringing awareness to health and community issues. Please feel free to connect, as I'm always looking to expand my network.