Tuesday 21 June 2011

Why Hazard Insurance is a Must in Most Instances

By Adam Ciboch


If you live in the United States today, you most likely live in a region that is prone to some natural disasters. In the Midwest, it's tornados. On the West Coast, you've got your earthquakes. In New England, snow storms are a big deal. And in the South, hurricanes are not at all uncommon.

That's why you should do your research on hazard insurance. Specific natural disasters that cause damage are covered under hazard insurance, also referred to as homeowners or property insurance.

A general homeowners insurance policy sometimes bundles hazard insurance into it. Comprehensive form of coverage is often what this is known as. Usually, a homeowner needs to purchase more insurance for specific types of disaster relief, because a typical homeowners insurance policy generally just comes with a little bit of hazard insurance coverage. For example, you can add on additional hazard insurance policy coverage for damage resulting from tornados if you live in Nebraska, after purchasing your regular homeowners insurance policy.

It should be noted that, as seen above, there is an important difference between homeowners insurance and actual hazard insurance. Some of the most comprehensive policies already offer all you need in terms of hazard insurance for specific natural disasters, while others are limited in their coverage protection, requiring you to purchase additional coverage for specified natural disasters. If your insurance policy is truly comprehensive, it will cover liability from damage, as well as the physical damages you actually incur. Keep in mind, though, that hazard insurance on its own generally only covers physical damage to your property and not liability.

Overall, since policies can vary greatly, it pays to do your research before committing to sign a contract on either one. In addition, working with a real estate broker might also be a good option if you're unfamiliar with many insurance terms. Real estate brokers are particularly wise choices for first-time homeowners who may have only dealt with renters insurance in the past. While renters insurance is a good introduction to what homeowners insurance does, since landlords or property management companies tend to cover physical damages to the outdoor rental premises, it is certainly not the same thing entirely.




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