What is the difference between hazard and home owners insurance?


These two are often confused with each other as they cover similar things, but there are also differences between the two.


Homeowners insurance covers the home's structure, fixtures and contents from risks such as hail, wind, storm or fire.

Hazard insurance, on the other hand, covers risks or events that are not covered by homeowners insurance. However, the coverage is usually limited to the home and not to the contents. Usually, this kind of insurance covers a specific hazard and is added to the homeowners insurance as a rider. Some of the events covered by the hazard insurance include termites, terror attacks, acts of war, earthquake and flood. There are hazard insurance that are provided by private insurance companies and some types of hazard insurance that are sold by the federal or state government.

Another difference between the two is that homeowners insurance is more comprehensive, aside from damage to property, homeowners insurance can also cover:

  • Liability - when the homeowner is faced with a lawsuit due to an injury or loss that happened inside the home.
  • Loss of use - when the home is being repaired and is currently uninhabitable.
  • Medical expenses - when a visitor is injured and needs medical attention
  • Personal property - coverage includes the contents of the home

Hazard insurance will not cover this but only focuses on protecting the structure of the home. That means that the homeowners insurance policy is more comprehensive.


What may happen is that you can purchase a comprehensive homeowners insurance coverage and then purchase additional hazard insurance to cover for specific events. For instance, those who live in earthquake prone areas can buy homeowners insurance and then buy earthquake hazard insurance.

Homeowners insurance provides coverage for such things as windstorms, thunderstorms, fire, broken pipes or water heaters. Hazard insurance, on the other hand, will cover risks that are considered low-risk but high cost events.

Calculation of Claims

Homeowners insurance can be based on either actual value or replacement cost, while hazard insurance is mainly based on replacement cost.

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