What’s the difference between hazard insurance and home insurance?

 Hazard insurance is actually part of a homeowners insurance policy. In fact, it may be the coverage part most homeowners associate with insurance because it covers the structure of your primary residence. But most home insurance policies have additional coverage parts that protect more of your property as well as your liability.

Let’s take a closer look at the differences between hazard insurance and home insurance so you can be sure you have the right coverage for your property.

What is hazard insurance?
Hazard insurance protects the physical structure of your home against specific losses, such as fire or wind. This is typically the minimum insurance mortgage companies require to secure a loan, but that doesn’t mean you need an additional policy. The dwelling coverage in your home insurance is hazard insurance, so if you have that, then you have the right type of coverage.

Whatever you call it, hazard insurance helps you recover when the physical structure of your home is damaged. The physical structure includes your home’s foundation, roof, and walls, but it may also include certain fixed appliances, countertops, flooring, and other permanently attached fixtures. When covered losses occur, your insurer reimburses you for the costs you incur to repair the damage.

On the other hand, hazard insurance doesn’t have all of the coverage parts that home insurance policies have. It doesn’t cover other sources of loss like liability claims or injured guests’ medical costs. Other structures on your property, such as a detached garage, are not usually protected by hazard insurance, nor are your personal belongings. Damage to these types of structures isn’t covered by hazard insurance.

Covered perils in hazard insurance
Most insurance companies offer hazard insurance that covers your dwelling on an open peril basis. When you have open perils coverage, you're covered for any loss caused by any peril except for those specifically listed in the policy as exclusions.

The specifics can vary by insurance company, but open perils coverage means you’re typically protected in losses caused by common problems homeowners face, such as:

• Fire or lightning.

• Windstorm or hail.

• Riot or civil commotion.

• Smoke.

• Vandalism or malicious mischief.

• Theft.

• Weight of ice, snow, or sleet.

However, hazard insurance typically excludes damage caused by general wear and tear, intentional acts, and neglect. Moreover, most policies don’t cover flooding, even if your mortgage company requires it. For that, you’ll need flood insurance.

Coverage can also vary significantly based on location. For example, home insurance companies may exclude coverage for wind damage in areas prone to hurricanes.

What is home insurance?
While hazard insurance refers to the portion of your homeowners policy that covers the structure of your home, home insurance includes it plus additional coverage parts that protect homeowners in other losses they’re likely to face.

Dwelling coverage
As we mentioned, dwelling coverage is essentially hazard insurance, so it covers the physical structure of your home, such as the roof, foundation, walls, windows, installed cabinets and counters, and permanently attached appliances.

Other structures coverage
Other structures coverage is similar to dwelling coverage, except it responds to losses involving structures on your property other than your primary dwelling. Some examples of other structures include detached garages, fences, sheds, or greenhouses.

Liability protection
Personal liability coverage protects you should someone outside of your immediate family claim you caused their bodily injury or property damage. If the issue ends up in court, personal liability insurance helps in your defense.

Personal property coverage
Personal property coverage is for the contents of your home, such as your clothing, furniture, and electronics. Many policies also cover your belongings beyond your primary residence – like a laptop stolen at a coffeeshop.

Loss of use coverage
Loss of use coverage helps with additional living expenses if a covered peril forces you to stay somewhere other than your home. For homeowners who are also landlords, this coverage can also cover lost rental income.

Medical expense coverage
Medical payments coverage helps with a guest’s medical bill if they’re insured at your home.

Key differences between hazard insurance and home insurance
Identifying key differences between hazard insurance and home insurance isn’t easy because the former is a subset of the latter. That said, you do want to be able to distinguish one from the other so you don’t end up buying insurance products that don't fit your needs – or your mortgage loan requirements!

Scope of coverage
The biggest distinction between hazard insurance and home insurance lies in the scope of coverage. Hazard insurance only covers the structure of your home and usually nothing else. And while there are several types of home insurance policies, most cover the structure of your home plus other things, such as liability, personal property, and other structures.

Cost
Your homeowners insurance premium can be a few hundred to a couple thousand dollars each year based on how much coverage you need, where your home is located, and what insurance company you use. Hazard insurance is almost always included in that cost.

Mortgage requirements
The term “hazard insurance” is commonly used by mortgage lenders to identify the type of coverage they require before they sign off on a loan. But that doesn’t mean it’s a separate policy from home insurance. In fact, some mortgage companies may also require some of the other coverage parts found in a standard homeowners insurance policy.

How to choose the right coverage
Luckily, you don’t have to choose between hazard insurance and home insurance. If you have a home insurance policy, then you have hazard insurance.

That said, you want to make sure you have enough hazard insurance included in your home insurance so that you can recover should you ever face a catastrophe or natural disaster. You can start by estimating the replacement cost of your home. It’s the basis for figuring out how much home insurance you need.

But don’t forget that home insurance is required by most mortgage lenders, so check what your lender requires when shopping for a policy.

And if that all sounds like a lot, then get in touch with an insurance agent or broker. Either one can help you determine if you have sufficient coverage.

The ultimate guide to filing a roof damage insurance claim: When and how to file-4

  You might not spend a ton of time thinking about your roof, but perhaps you should. Not only does your roof protect you against the elements, it also provides structural support and insulation.It can even increase the value of your home. 

That's why it’s so important to take good care of your roof – and perhaps more important to take care of damage to it as soon as you can. 

This is the whole reason you have home insurance: to make sure you have the financial means to repair unexpected damage quickly.

So let’s take a good look at filing roof damage claims – what’s typically covered, what’s usually not – as well as tips for keeping your roof in good shape and filing a claim if you ever need to.

Understanding the roof insurance coverage in your policy

Before we dive headfirst into identifying the type of roof damage your home insurance covers, let’s start with the overall purpose of home insurance.

Homeowners insurance is financial protection that helps pay for unexpected expenses resulting from certain kinds of damage to your home. Essentially, you pay a premium so that your insurance company helps cover the cost of repairing or replacing your property. 

But note, we say it covers certain kinds of damage. That’s because home insurance is designed to cover sudden or accidental damage. It’s not intended to help you pay for damage created by things like age, poor maintenance, or neglect.

Moreover, your home insurance, and the roof damage coverage in it, usually only cover damage caused by specific perils. Earthquakes and floods may cause sudden and accidental damage, but most home insurance policies don’t cover it. 

Types of roof damage covered by insurance

So what types of perils are covered by standard home insurance? The answer depends on your particular policy, but many policies cover damage caused by some rather common events, including:

• Fire. 
• Wind. 
• Snow and ice. 
• Falling objects. 
• Lightning.
• Fallen trees.

When your roof is damaged by a covered peril, your insurance likely will help to repair or replace it up to your coverage limit and minus your deductible.

Types of roof damage not covered by insurance

While a standard home insurance policy covers several common causes of roof damage, it usually excludes damage caused by:

Insects and termites. Damage from termites and insects to roofing is considered neglect or poor maintenance, so it’s generally not covered by home insurance.

Rodent and bird damage. Roofs damaged by rodents or birds are generally not covered by insurance.The reasoning is similar to termite damage: As a homeowner, you’re responsible for identifying these issues before they get out of hand.

Rust. Claims stemming from rusty metal components are typically denied because that’s considered normal wear and tear.

Mold. Mold can cause damage, sometimes unseen, to roofing and roofing structures and is frequently excluded. However, some insurance policies have a limited amount of mold coverage.

Rot. when damaged roofs remain unrepaired, rotting can result. This can be the result of neglect, in which case it’s not covered by home insurance.

As you might be able to tell from this list, roof damage caused by normal wear and tear isn’t covered by home insurance. Roofs have a lifespan, so they ultimately wear out over time. 

Similarly, your home insurance doesn’t cover damage caused by poor maintenance and neglect. Insurers are in the business of protecting homeowners from disasters, not covering routine upkeep.

Know your coverage options: Actual cash value vs. replacement cost value

When securing home insurance, one of the most essential coverage options is choosing between replacement cost value (RCV) and actual cash value (ACV).

What is the replacement cost value?

Replacement cost value is what you would pay to replace your entire home at today’s prices if it’s completely destroyed by a covered peril. This protection can be enhanced through endorsements like extended replacement value or even guaranteed replacement value.

What is the actual cash value?

Actual cash value (ACV) is the present value of an item after accounting for depreciation. Claim settlements for items insured for their ACV are generally lower than those covered for their replacement cost value.

ACV vs. RCV for your roof

Home insurance companies generally want to cover the structure of your home for its replacement cost. That way, you can be made whole if you ever face a catastrophe. 

But aging roofs can be harder and more expensive to insure. One solution for that is to add an endorsement that changes the roof coverage so it’s based on the roof’s actual cash value.

Some insurers also offer a roof surfacing payment schedule, which typically reduces the claim payout to a predetermined percentage of the roof’s replacement cost value, depending on the age and surfacing materials of the roof. The result is a lower premium because you’ve chosen more restrictive coverage.

Signs your roof is damaged

Signs that your roof is damaged or wearing out are often easy to spot. Hidden signs, however, require both attention and regular maintenance.

Visible signs of roof damage

Missing or broken shingles

Shingles can become dry and brittle as your roof ages. When this happens, wind, rain, and hail can cause them to break or blow away, so you want to regularly check your roof for missing or damaged shingles.

Sagging roofs

A wavy or sagging roof is a pretty good sign that the plywood or subroofing has become warped or damaged due to moisture.

Watermarks

The interior of your home can also have visible signs of roof damage, like watermarks on your ceilings or walls. These can be a symptom of a roof leak.

Hidden signs of roof damage

Hidden water stains

Leaks don’t always leave visible water stains. You can also have water damage from a roof leak hidden behind cupboards, closets, behind paneling, or under tile.

Mold

Fungi, mildew, and mold can be clearly visible on exterior walls, but they can occur inside your walls. Another place of concern? Any area you don’t use often, like an attic and basement. Even a small roof leak can cause mold to develop over time.

When to file a roof damage claim

Your homeowners insurance is there to help you recover from serious roof damage. If you experience circumstances like these examples after a covered peril damages your roof, be sure to alert your insurance company so you can start the claims process as quickly as possible.

The damage is substantial

Your roof is an extremely important part of your home. If you see extensive damage, you’ll likely want to file a claim immediately.

The damage may have weakened the roof

Damage that has weakened the roof structurally may cause further damage, or worse, harm the occupants. It also makes getting repairs more urgent, so you may want to file a roof damage insurance claim right away.

The damage was caused by an act of God

Storms are a good example of the acts of God home insurance is designed to cover. If you have damage from wind, hail, ice, or snow, definitely consider filing a homeowners insurance claim.

Damage exceeds your deductible

When roof damage meets or exceeds the deductible of your home insurance policy, you may want to file a claim.

You are within the filing window

Following a covered peril, you may have a specified period to file a roof damage claim. The timeframe can be as short as 30 days but as long as a year or two. Check your policy or speak to your insurance representative before you have a claim so you’re ready to go if you ever need to file.

Steps to file a roof damage insurance claim

Taking the appropriate steps following roof damage can help you successfully file your claim effectively and efficiently.

Document your damage

Note the date, time, and circumstances surrounding the damage you received. A video or photographs of the damage you sustained can be a big help to your insurer, especially if you’re able to include photos of your roof before any damage occurred.

Contact your insurance company

You need to alert your insurance company to start the claims process, a step you can usually take by either calling your insurer or going to its website. Be sure to keep good notes regarding the dates and times of each contact with your insurer, and write down all of the instructions the claims adjuster provides.

Review your policy

While we definitely think you want to know what’s in your policy before you have to file a claim, we understand that most people don’t think about their home insurance until they need it. Take a look at your policy for information about your duties and obligations in a claim.

Get an estimate

You may need to hire a qualified roof inspector to evaluate the damage and estimate the cost for repairs. This often requires patience after a major storm because so many people are doing the same thing, but you want to make sure you work with a reputable contractor to avoid fraud.

Work with the adjuster

For roof damage, your insurance company may send an adjuster to conduct an insurance loss inspection. You want to do your best to work with this individual by providing documentation and answering questions about your damage.

What happens during a loss inspection?

An insurance loss inspection establishes the cause and extent of the damage you experienced. During the inspection, a claims adjuster comes to your home to take a look at your damage. The adjuster may need to take photos of your damaged roof and any temporary repairs you’ve made.

The adjuster will send an inspection report to your insurer so it can decide if your coverage applies to the damage.

Tips for a successful roof damage claim

You can take practical steps to ensure your roof damage claim or other home insurance claim goes smoothly, such as:

• Keeping a record of all communication with your insurer.

• Providing multiple estimates from reputable contractors.

• Being clear and honest in your descriptions of damage.

Mistakes to avoid when filing a roof claim

Avoiding these mistakes can help you process your roof insurance claim and reduce the likelihood of paying higher premiums in the future.

• Filing a claim for minor issues. You may not want to file a claim if the repair cost is less than your deductible. However, you still need to let your insurance company know about any unrepaired damage to your roof.
• Not reviewing your policy in advance. Misunderstanding key details, like exclusions or limitations, can be a major source of frustration. Make sure you read through your policy so you know what’s covered, what’s not, and what your obligations are.
• Delaying necessary repairs. Taking too long to fix your roof can lead to further damage and could lead to your claim being denied.

Prompt action is essential to making a successful roof damage claim, but so is understanding your policy. If you’re concerned about your roof insurance coverage, schedule a home insurance policy review with your agent.

When does homeowners insurance cover basement flooding?

 

Standard home insurance policies may cover basement flooding, but it all depends on what caused the water to get in. For example, if your area is hit by a flash flood, then your homeowners insurance probably doesn’t cover your damage. But if your policy already protects against the event that created the problem, then there’s a good chance you’re covered. 

When does homeowners insurance cover basement flooding?

As a rule of thumb, home insurance policies don’t cover water damage when it’s caused by floods. But basement flooding can have other causes, and in some cases, those causes are covered by homeowners insurance. If the source is covered peril, then your policy likely helps you pay for repairs.

One important thing to remember about home insurance is that it’s designed to protect you from sudden, unforeseen, and accidental damage. Keep that in mind as we take a look at some of the perils that may trigger coverage for basement flooding.

Burst pipes and plumbing failures

If a pipe burst results in your basement flooding, then your home insurance could pay for repairing damage and replacing personal property. However, many policies put some restrictions on this particular peril. For instance, coverage may only apply if all of the following are true:

• You’re living in the home.

• Your home has been properly maintained. 

• You’ve kept your home at a minimum temperature.

Pipe bursts are often sudden and accidental, but they aren’t always unforeseen. As a homeowner, you need to take reasonable steps to keep pipes from bursting in order for your insurer to cover your loss.

Leaky household appliances

Washing machines, refrigerators and air conditioning units are all examples of household appliances that many homeowners keep in their basements. Unfortunately, they’re also good examples of items that may leak or malfunction, causing flooding in your basement.

Home insurance companies typically cover water damage in this instance as long as lack of maintenance or neglect is not the root cause. Your claim could be denied if your appliance shows signs of wear and tear or evidence of prior leaks.

Overflowing fixtures

Flooding caused by an overflowing sink, toilet or bathtub is known as localized overflow, and is usually covered by standard homeowners insurance policies. That’s also true if an appliance like your washing machine or air conditioner overflows.

Localized overflows are often considered to be unforeseen and accidental events, so they’re generally covered unless the issue is actually a lack of maintenance or negligence. However, evidence of prior overflows could affect the approval of your claim. 

When does homeowners insurance not cover basement flooding?

Not every event that causes basement flooding is covered by home insurance. Some natural disasters aren’t covered, but there are other instances when home insurance excludes water damage in your basement.  

Flooding from natural disasters

As we mentioned, home insurance excludes floods, so flood damage to your basement or the items stored is not covered. This includes flood damage caused by:

Heavy rains.

Storm surge from a hurricane.

Flash floods.

Groundwater.

Unfortunately, water seeping in from the backyard during particularly heavy summer rains is enough to create property damage. But you can get flood insurance to protect you from this kind of damage.

Sewer backups and sump pump failures

When sump pumps and external sewers fail suddenly, the backup can enter your home and create an expensive mess. However, sewer and sump pump backups or overflows are not included in most standard home insurance policies. 

One option is to see if your insurance company offers an endorsement that provides the additional coverage you need. This will mean a slight increase to your premium, but that may be worthwhile if sewer backup is a concern.

Foundation leaks and structural issues

Foundation cracks are a common cause of flooded basements, but it’s a tricky one for home insurance. Homeowners insurance tends to focus on damage that is sudden and accidental, so it covers only a few kinds of foundation issues. In general, a foundation crack that lets rainwater into your basement is seldom covered. The same can be said of poor landscaping or drainage.

Lack of proper maintenance

Home insurance is not designed to help you pay for regular maintenance. In fact, insurers assume you’ll take care of your home and its grounds so as to prevent damage. So while a  worn-out appliance or rusted pipes may result in a flooded basement, the damage does not trigger most insurance policies 

What coverage do I need for basement flooding?

Home insurance can help you recover from basement flooding in some situations, but there are several events where coverage doesn’t apply. This may mean you need to add endorsements to your homeowners policy to better protect your assets.

Standard homeowners insurance

Whether or not a standard homeowners insurance policy covers every instance of basement flooding doesn’t matter – you’re still better off getting a policy than trying to self-insure. Water damage is expensive to remediate and most policies cover the more common events that can cause a flood in your basement.  

Flood insurance

Flood insurance protects against weather-related flood damage, such as damage caused by heavy rains, snowmelt, flash flooding, and hurricanes. While coverage may be required in flood zones, it can be a valuable protection for homes in other areas. 

Most homeowners get their flood insurance from the National Flood Insurance Program, but private insurance companies may also offer policies and endorsements that protect you in floods.

Sewer backup and sump pump overflow endorsement

A sewer backup endorsement, also known as water backup coverage or drain line backup coverage, protects you when water backs up into your home from your plumbing system. It can help cover the cost of restoring your basement and replacing your personal property.

Service line coverage

Getting coverage for a sewer backup may only be half the battle for some homeowners because most home insurance policies don't pay to repair the actual service lines. If a problem with the sewer line is on your property you could be responsible for some very expensive repairs. A service line endorsement helps with this cost. 

How to mitigate basement flood risk

There is no doubt that homeowners insurance is a lifesaver after your home is damaged, but preventing problems in the first place is just as important. Here are some things you can do regularly to lower the risk of a basement flood. 

• Check your flood risk. Find out whether your home is located in a high-risk flood zone. If so, seriously consider adding flood insurance to your regular home insurance policy to counter the added risk.    

• Inspect your basement. Check your appliances, sump pump, sewer system and pipes on a regular basis to ensure all are in top working order. Look around your basement for cracks and discoloration; mold is also a red flag.  

• Check the grounds. Perform an inspection of the exterior of your home, noting any clogged gutters or lawn debris that may allow water to build up and seep into your home. Inspect the grading to make sure it drains water away from the foundation, and check for any cracks where water can get in. 

• Perform regular maintenance. Immediately address any issues you find during your inspection. This will give you a chance to fix any issues before they have a chance to grow into flood-worthy events.  

• Be prepared. When you know what to do during a flood, you can react much faster to prevent further damages. Make sure you are prepared with the right processes and tools to best protect your property, especially if you have an older home. Keep proof of homeowners insurance information easily accessible so you can access it easily when you contact your insurance agent.  

A little advance preparation can go a long way.