Hazard insurance vs. homeowners insurance: What's the difference?

by Loann Tran 03/10/2024

With so many apparent similarities between the two, hazard insurance and homeowners insurance are often mistaken for the same thing. Standard homeowners insurance policies include hazard coverage, but what about standalone hazard insurance?

Here is a basic comparison of hazard insurance and homeowners insurance to help clarify the differences and similarities:

Hazard insurance

Hazard insurance protects you financially if your property is damaged by a specific natural disaster. Some examples of hazard policies include tornado insurance, earthquake insurance and flood insurance.

Hazard insurance is typically required in certain areas where hazards are not otherwise covered by the standard homeowners insurance policy.

Homeowners insurance

Homeowners insurance includes basic hazard coverage for damage to your home from extreme weather, theft and other perils. It specifically includes dwelling coverage, which protects the physical structure of your home, and personal property coverage, which protects your belongings.

Homeowners insurance protects the contents of your home as well as the home itself. This is a major difference between homeowners and hazard insurance. Generally, home insurance covers a broader range of hazards, but won’t be able to help you if certain specific hazards, like tornadoes, occur.

Do you need hazard insurance?

Whether you require additional hazard insurance is dependent on your personal preference and where you live. In regions where tornadoes are common, for example, your mortgage lender might require you to get a tornado 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 by something otherwise excluded from your home insurance.

About the Author
Author

Loann Tran

With over 30 years of real estate experience, Loann Tran is a trusted and award-winning REALTOR® in the Bay Area. A top producer since 1995, she’s known for her deep market knowledge, strong negotiation skills, and unwavering commitment to her clients. Loann has successfully navigated all market conditions—including the 2009 downturn—and consistently ranks among the top 10% of agents in Santa Clara County. Now with Compass, she combines her expertise with innovative tools and technology to deliver exceptional results. Clients value her integrity, attention to detail, and personal approach, making her a reliable partner for both buyers and sellers.