Free Insurance Guide

Mortgage Hazard Insurance Is Also Known As Home Owners Insurance

When you are purchasing a home on payments you will be required to carry an insurance policy to cover any damage that may happen to the property during the loan period. This type of policy is referred to as mortgage hazard insurance. Most people know this type of policy as a homeowner’s policy or property insurance.

A hazard policy will cover most damage to a property by unintentional acts, provide some liability protection to the owner and, possibly, cover some out-of-pocket expenses paid by the owner during an emergency. Coverage varies from state to state as well as company to company. You should familiarize yourself with your policy prior to making the purchase.

Many insurers will not cover damage from flooding in their homeowners policies. If you are in a flood prone zone, you should make sure that you are covered for this type of damage. Special flood only policies can be purchased through FEMA if your company does not provide the service.

Hazard insurance also may not cover specific events if your area is prone to natural disasters. Florida, for example, does not offer hurricane damage coverage in their hazard policies. Hurricane coverage must be purchased separately. Other states prone to high winds, mud slides or earthquake activity may find their policies require additional riders to extend coverage.

When you have a mortgage on a property you are required to provide protection to that property. This comes in the form of an insurance policy. Unlike mortgage insurance, which protects the financial side of your mortgage, hazard policies protect the physical side of your investment. Having this type of insurance is not optional. If you have a mortgage through any type of lending institution, you will be required to insure your property. Always verify your coverage. This will ensure that in the event of an emergency you are properly covered.

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