Hazard insurance is an important part of a standard homeowners policy, which is why these two terms are often assumed to mean pretty much the same thing. Hazard insurance isn’t a separate policy, but the nature of the coverage is different from the other parts of a basic policy. We clear things up below by highlighting the differences between homeowners and hazard insurance.
You already have hazard insurance if you have a homeowners policy, so it’s nothing you have to specifically request. The main difference is “homeowners insurance” refers to everything in the policy, not just the hazard coverage. While policies can be individualized to address specific needs and preferences, a standard homeowners policy includes:
• Dwelling coverage – This part of your policy provides protection for your home’s physical parts (e.g., foundation, windows, roof, etc.).
• Loss of use – Coverage of this nature applies if you have to temporarily live somewhere else due to issues with your home.
• Personal liability protection – In this case, you would be covered if someone sues you because of injuries sustained in your home.
Many other types of coverage can be included in a homeowners policy. Common options include personal liability and medical payments coverage. Structures not directly attached to your home, like a greenhouse or detached garage, can also be covered by your policy.
Hazard insurance refers to the specific “perils” covered by the homeowners policy. These are essentially any hazards that could potentially damage your home, although there are some exceptions. Storm and fire damage are among the common perils usually covered by the hazard part of your policy.
Named Perils vs. Open Perils
Hazard coverage can apply to either named perils or open perils. The difference here is in how the determination of what’s covered is made. With named perils, only the specific listed hazards that could cause damage to your home are covered. Named perils typically include damage related to such things as:
• Theft or vandalism
• Strong winds and hailstorms
• Trees falling on your property
If you go with an open perils policy, you’ll get a list of exclusions—meaning what’s not covered. Pretty much any type of damage to your home that’s not excluded will be covered in this case. However, there’s generally a fairly long list of open peril exclusions. Typically, it includes damage related to power failures, pets, and neglect of your home, among other things.
Pay attention to the hazard part of your homeowners policy, since you’ll have to choose between named and open perils. While it may seem like you’re somewhat limited with open perils due to the long list of exclusions, this isn’t the case. In fact, you’ll get much more flexibility with the types of damage that may be covered if you go with open over named perils. This is why it’s common for homeowners to prefer this option with hazard coverage.
No matter which type and amount of coverage you choose, make sure to buy your home insurance from a trustworthy, experienced provider. For reliable, affordable home insurance, San Diego homeowners know they can trust Altra Insurance Services. We also provide renters, commercial, motorcycle, and Auto & car insurance in National City. Their residents can receive a free quote by calling one of our friendly agents today at (619) 404-6311.