Hazard Insurance safeguards a property owner against major property damages due to several reasons such as fires, storms, earthquakes, and other natural calamities. This insurance policy acts as a cover and offers compensation to the homeowners when the said event strikes. More often than not, the concept of such an insurance is misinterpreted. Here are a few pointers that can help you understand it.
It Is Not The Same As Homeowner’s Insurance
While the Homeowner’s Insurance covers some of the damages that occur due to natural calamities, many of them are left unwarranted. The case is different with hazard insurance, as it covers almost every source that can damage a property. Vandalism, theft, explosion, and lightning are a few examples of the disasters that are covered by this insurance.
Extra Protection Is A Must
Hazard insurances are of different variants and the basic ones do not compensate any specific physical damages to your property. This is where extra protection is necessary, and this can be obtained by paying more money on your coverage. For instance, one will need an earthquake cover to procure compensation on the physical damages of the property that occur due to it.
It Can Be A Part Of Monthly Mortgages
Mortgage lenders are usually very intent on protecting their investments, i.e., your property, which is why they recommend this type of insurance along with other insurances. Most of the mortgage lenders will incorporate your mortgage payments and the insurance premiums into one single payment, making it easier for you to keep track of it.
Hazard Insurance Has Its Downside
Although this insurance is a common occurrence these days, the number of homeowners who vouch for insurance providers who offer this, has been going down gradually. This is due to the high number of claims by property owners in some major cities and states. Also, there is a high chance that you may not get a cover if you have already claimed the compensation before.
It Is Not Always Necessary
Yes. A homeowners’ insurance covers most of the events that a hazard insurance does, such as theft and vandalism. Remember, unless you have something extremely valuable that you need insured, there is no real need for such a policy.
Hazard insurance is what will ultimately provide you compensations for your property damages or loss of property. But remember, it is quite expensive, so be completely confident before you purchase this insurance.