You need to protect your home on all fronts. Incomplete protection is almost as bad as no protection at all. And just like your home security system is there to protect you in case someone breaks in, your homeowners insurance is there to protect you in case something goes wrong on top of that. Home insurance is home security, after all.

But let’s be honest: Homeowners insurance is not the most accessible topic. Perils and premiums, claims and coverages — sometimes you feel like you need a dictionary just to understand what protections you’re purchasing, and if those protections are going to be adequate.

We’re going to demystify home insurance and hazard insurance, starting by defining the two important terms that are often used incorrectly. Let’s dive in.

Home insurance covers several different kinds of "perils"

Home insurance covers several different kinds of “perils”

Is Homeowners Insurance the Same as Hazard Insurance?

The answer to this question is sort of both yes and no. Essentially, hazard insurance is part of your homeowners insurance policy. Think of it this way: When you buy a car, the seats are included, right? Hazard insurance is the seats, and homeowners insurance is the car.

FYI: When it comes to home insurance, the better your protections, the more expensive your premium will be. Exactly how much more depends on a huge variety of factors, including your home’s value, location, age, and how it was constructed.

Simply put, if you have homeowners insurance, then you have hazard insurance as well. The confusion is likely due to the language lenders use during the home-buying process. The terms often are used to mean the same thing, or they are spoken about in such a way that makes some folks think they are two entirely different things. Hazard insurance is simply a specific part of your homeowners insurance policy.

Now let’s talk specifically about what your hazard insurance includes, and what your greater homeowners insurance policy protects against.

FYI: If you’re searching for a solid home insurance policy with plenty of add-ons, we recommend looking into our Lemonade policies guide or our full State Farm review.

What Is Hazard Insurance?

The term “hazard insurance” refers to the section of your greater homeowners insurance policy that deals with the threats — also called perils — you’re protecting yourself against. There are two ways insurance providers deal with this: a named or an open perils approach.

A named perils policy will protect you against 16 specific threats. They are:

Named perils policy

Any damage caused by a threat not included on this list will not be covered by a named perils policy. Before you scramble to see what kind of policy you have, it’s extremely unlikely that your provider took a named perils approach. Unless you specifically requested it, you likely have an open perils policy. The vast majority of the homeowners insurance in America is what’s called an HO-3 policy. The second most popular is HO-5, and both use an open peril approach.

FYI: The vast majority of homeowners policies are HO-3. That’s the “default” policy these days, accounting for more than 80 percent of current homeowners insurance policies in the U.S.

Open perils policies protect against a huge number of threats to your property, but there are a few common exceptions. Most standard policies will not protect you from:

Open perils policy

That may seem like a pretty long list, but open peril policies actually protect against a lot more than they exclude. If you’re worried about a particular item on this list, like say, earthquakes or floods, most providers offer riders for additional coverage. They’ll bump up your premium a bit — or considerably so if you live in an area regularly affected by those perils — but it’s always better to be safe than sorry.

Collectively, these sections of your policy — where your covered perils are defined — are considered your hazard insurance. To fully understand this, we need to take a look at your policy as a whole.

What Is Homeowners Insurance?

The main goal of homeowners insurance is to protect you in the event your home is significantly damaged, or, in extreme cases, destroyed. Hazard insurance plays a major part in this protection, but it’s not the total package. Most standard homeowners insurance policies protect you in six ways.

  • Dwelling coverage: This protects your home itself from peril. The limit of your policy determines how much your insurance provider will pay out if your house is damaged.
  • Other structures coverage: This covers all the structures on your property, such as a detached garage, shed, gazebo, or fence. The amount your provider will pay out if these structures are damaged is usually a percentage of your dwelling coverage.
  • Personal property coverage: This protects all the stuff you own. Again, the amount your provider will pay out is usually a percentage of your dwelling coverage, and, depending on the policy type, they’ll either pay to replace your belongings or cut you a check for their depreciated value. Obviously the former is more expensive than the latter.
  • Medical coverage: If someone is injured on your property — let’s say the pizza guy trips over a broken piece of your patio — this coverage will take care of a portion of the medical costs if you’re found at fault. Usually this figure is a set limit, but it can be adjusted when you purchase your policy if need be.
  • Liability coverage: Similar to medical coverage, your liability coverage will protect you if that same pizza guy decides to sue you for pain and suffering or lost wages. This limit is usually a set figure, but you can play around with the dollar amount when you purchase your policy.
  • Loss-of-use coverage: This protection will help you pay for any out-of-the-ordinary expenses incurred if your home becomes uninhabitable as the result of a covered event. It may be hotel room stays or the cost of eating out with your family. The limit will usually be between 20 percent and 30 percent of your dwelling coverage.

You may be a little ahead of us already, but the first three coverage types are considered your hazard insurance and the last three are not. There’s no need to purchase additional hazard insurance unless you’d like to add a rider to your policy to protect yourself from one or more of the perils specifically excluded by your policy.

Pro Tip: Want to learn all about the costs associated with homeowners insurance? We recommend digging into our home insurance cost guide. It has everything you need to get a firm grasp on premiums, deductibles, and more.


What Additional Hazard Insurance Should I Purchase?

Most folks find that the protections offered by their standard homeowners insurance policy are enough, but some may feel their policies are a little lacking on hazard insurance. Not to worry though. Most major providers offer additional coverage or they can point you in the direction of partners who can ensure your policy is as comprehensive as you need it to be.

Some of the most common hazard insurance add-ons — ones you may consider — include:

  • Flood insurance: Most standard policies will not protect you from storm surges, levees breaking, rivers washing over their banks, or flooding from heavy rainstorms. A general rule: If the water is naturally occurring, it’s unlikely your policy will cover the damage unless you add flood insurance to your policy. Obviously it will cost a little more in regions, states, and neighborhoods where flooding is more likely to occur.
  • Earthquake insurance: Just like flood insurance, if the earth starts shaking or opens up to swallow your carport, then your standard policy is unlikely to protect you. Adding this particular protection will make sure the damage caused by earth movements will be covered by your policy. It’ll be a little more expensive in areas more prone to these events.
  • Mold insurance: Mold is a bit tricky. The common wisdom is that mold won’t be covered by your traditional homeowners insurance policy, but that’s only half true. What matters most is the source of the mold. If it’s caused by a covered factor such as a washing machine breakdown, then its remediation is likely to be covered. If it’s the result of negligence or natural forces such as heavy rains or flooding, then you’re likely on your own. Adding a mold rider to your policy will make sure you’re protected — within reason — regardless of the mold’s source. See our full mold insurance breakdown to learn more.

FYI: All three of these additional protections will add to your premium, and, depending on where you live, the amount could be significant. Earthquake insurance will cost a lot more in Los Angeles than in Tulsa, for example.

That’s about all there is to know in regard to hazard vs. homeowners insurance. Before we leave, though, we have a few parting thoughts.

The Final Word on Hazard vs. Homeowners Insurance

As you now understand, hazard insurance is just a portion of your overall homeowners insurance policy. There’s no need to purchase separate hazard insurance unless you feel like your overall policy is in some way lacking.

Now that you have this knowledge, it’s time to start looking for your homeowners insurance provider. A fantastic place to start is our list of the top 10 best providers of 2023. You’ll find all kinds of insurance companies that offer a wide variety of protections for any sort of budget.

Good luck in your search, and stay safe out there!

Hazard vs. Homeowners Insurance FAQs

Is hazard insurance the same as homeowners insurance?

Some people use the terms interchangeably, and some make it sound like they’re two entirely different things. The truth is, “hazard insurance” refers to the specific portion of your overall homeowners insurance policy that codifies what will and what will not be covered.

What’s the difference between hazard insurance and homeowners insurance?

Your homeowners insurance policy protects you from things like medical and legal liability, but your hazard insurance refers to the specific part of your policy that names what it will and won’t cover.

Do I need to purchase additional hazard insurance?

Most homeowners feel their policy adequately protects them from most threats, but some feel the need to purchase additional hazard insurance.

Does my homeowners insurance policy have hazard insurance?

More than likely, yes. Unless you’ve specifically requested an out-of-the-ordinary piecemeal policy for a property you own outright, your provider includes hazard insurance in your package.

What additional hazard insurance do I need?

Some folks feel like their standard homeowners insurance won’t protect them comprehensively, and opt to include additional hazard insurance such as earthquake and flood protection.