When purchasing a new home, you’re going to be faced with a multitude of costs on top of the purchase price of your home. Some of these costs will be associated with keeping your home and belongings safe in the event of disaster or theft, and some will be required by your bank or mortgage lender for additional reassurance behind your purchase. 

Though you may have heard of the insurances related to homeownership before, you might still wonder, “is hazard insurance the same as homeowners insurance?”. This topic can be confusing to navigate for a lot of home buyers (especially first-timers), so we’ve got all of your answers as to hazard insurance, homeowner’s insurance, and what each type entails. 

What is Hazard Insurance?

 First things first – let’s figure out what each type of insurance is for those who are either first-time homebuyers or just not familiar with all of the insurance lingo associated with buying a home. 

Hazard insurance, also known as mortgage hazard insurance, is a type of insurance you’ll need to get in order to get approved for your mortgage. Though hazard insurance is usually included in your homeowners’ insurance, it’s not the same thing as the other type. 

Hazard insurance usually refers to insurance covering just your home’s structure. Many mortgage lenders require this type of insurance to be included in your other policy to cover the home in the case of damage caused by fire, hail, lightening, theft, vandalism, falling trees, explosions, and more. 

When Can I Stop Paying Hazard Insurance? 

Because hazard insurance is usually a part of your homeowners’ insurance policy, you’ll pay hazard insurance as long as you have homeowners insurance, but you might have the option to lower your coverage amount once your mortgage has been paid off and your lender no longer requires a certain amount of coverage. 

What is Homeowners Insurance? 

Homeowners’ insurance is a term referring to your overall policy that covers your home and your belongings in the case of theft, damage from natural disasters or the elements, as well as a host of other factors. Many policies also cover you for any liabilities associated with injuries or damage to or from others within your home. 

Homeowners insurance is an umbrella term that envelops many different policies within it. You can choose to add or take off different insurance policies depending on how you want to be covered or how much you’d like your premium to be. 

Hazard Insurance vs. Home Insurance

Now that we know what hazard insurance is and homeowners insurance is, let’s discuss the difference between the two. 

Though you’ll usually receive hazard insurance under your home insurance policy, this type of insurance serves to protect just your home, whereas home insurance covers your home, your belongings, and those within your home in the event of disaster or injury. Hazard insurance is a subsidiary of home insurance, and one will usually go with the other despite being different things. 

Looking into buying your first home? On top of researching the best homeowners policy for you, make sure to also have Reebie Storage & Moving Co. on your side to get your belongings to your new home safely and efficiently.