Question:

Hazard Insurance Definition

Answer:

Hazard insurance is often called property insurance or homeowners insurance. It is a policy against damage and loss on the property caused by specific man-made or natural events, and against liability of the homeowner in case someone suffers injury on the owner's premises.

When talking about hazard insurance, it is often meant to be a comprehensive insurance policy. Sometimes, a homeowners insurance will be considered comprehensive and a hazard insurance will signify additional insurance coverage against common natural disasters for the area. For example, you may need additional flood hazard policy in Florida and earthquake policy in California.

Lenders require that borrowers obtain hazard insurance when applying for a mortgage. To reduce premiums of the hazard insurance, borrowers may purchase greater deductible.

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