DEFINITION of 'Hazard Insurance'

Insurance that protects a property owner against damage caused by fires, severe storms, earthquakes or other natural events. As long as the specific event is covered within the policy, the property owner will receive compensation to cover the cost of any damage incurred. Typically, the property owner will be required to pay for a year's worth of premiums at the time of closing, but this will depend on the exact details of the policy.

BREAKING DOWN 'Hazard Insurance'

A typical property or homeowners' insurance policy usually won't cover all events that could do damage to your property. Some events will definitely be excluded from homeowners' insurance in high-risk areas. For example, Florida is prone to hurricanes and is, therefore, considered high risk. If the homeowner lives in a high-risk area, he or she may need a separate policy - such as a flood insurance policy.

RELATED TERMS
  1. Property Insurance

    A policy that provides financial reimbursement to the owner or ...
  2. Fire Insurance

    Insurance that is used to cover damage to a property caused by ...
  3. Contractors' All Risks (CAR) Insurance

    An insurance policy that provides coverage for both damage to ...
  4. Total Insurable Value

    Total insurable value is the value of property, inventory, equipment, ...
  5. Water Damage Insurance

    A type of protection provided in most homeowners insurance policies ...
  6. Insurable Interest

    An economic stake in an event for which an insurance policy is ...
Related Articles
  1. Insurance

    The Importance Of Property Insurance

    Property insurance is important, but there's a lot you need to learn in order to get the proper coverage.
  2. Insurance

    What Is and Isn't Covered by Homeowners Insurance

    Understanding what your insurance covers can be confusing. Learn what almost all insurance policies have in common so you're prepared if disaster strikes.
  3. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about insurance to protect their residence.
  4. Insurance

    Homeowner’s Insurance Gaps to Watch Out For

    Wind and flood damage. Sewer backups. Sinkholes. What coverage are you missing that could cost you a bundle in repairs?
  5. Insurance

    Understanding Lender-Required Flood Insurance

    Having to buy flood insurance shouldn't be a surprise. Find out what you need to know when purchasing or refinancing a house.
  6. Insurance

    Have The Right Condo Insurance?

    How well does your condo's master-insurance policy protect you? Here's why you'll probably need separate insurance for your own unit and possessions.
  7. Managing Wealth

    The Best Way to Insure Your Jewelry

    What you need to know to keep those baubles, bangles and beads safe.
  8. Insurance

    Hurricane Insurance Deductible Fact Sheet

    If you're a homeowner with property in a high-risk hurricane area, you need to understand the special details of your hurricane insurance deductible.
  9. Managing Wealth

    Making Sure Your Jewelry Is Insured

    Homeowners insurance only covers so much - find out how to make sure your jewelry is covered for theft, loss and damage.
RELATED FAQS
  1. What are some examples of unexpected exclusions in a home insurance policy?

    Learn about commonly excluded perils with different standard insurance policies. Explore events that homeowners should consider ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. Does homeowners insurance cover tree damage?

    Discover how damage to a home from fallen trees is covered under your homeowners insurance policy if it happens suddenly ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  5. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  6. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
Trading Center