In certain cases, homeowners insurance is referred to as "hazard insurance," "dwelling coverage," "HO-3 insurance," or "HO-5 insurance." These terms are used interchangeably to describe the same essential protection that safeguards a homeowner's property against various risks and liabilities. Understanding these alternative names can be helpful when researching and shopping for home insurance.
TABLE OF CONTENTS
- Other Names for Homeowners Insurance
- Hazard Insurance vs. Homeowners Insurance
- How Homeowners Insurance Works
- Cost of Homeowners Insurance
- FAQ
Key Takeaways
Homeowners insurance is also known as “hazard insurance,” “HO-3 insurance,” or “HO-5 insurance.”
Dwelling coverage in home insurance is also referred to as “hazard insurance.”
You can get home insurance for your home by shopping around and choosing an insurance provider with an excellent reputation.
What Are Other Names for Homeowners Insurance?
Depending on the region and context, homeowner insurance is known by various names and terms. Some common alternative names for homeowners insurance include:
- Hazard Insurance: This term emphasizes the protection against specific hazards or perils that homeowners insurance provides. It also refers to “dwelling coverage” and does not encompass the other coverages of home insurance, such as personal property coverage or liability coverage.
- Dwelling Coverage: This name highlights the primary focus of the policy, which is to protect the home's physical structure. However, this excludes personal property coverage and liability coverage, which are other types of home insurance coverage.
- HO-3 Insurance: HO-3 is a common homeowners insurance policy type, often referred to by its policy code.
- HO-5 Insurance: Similar to HO-3, HO-5 is another policy type offering broader coverage and is sometimes used interchangeably with homeowners insurance.
These alternative names are different ways of describing the same fundamental insurance coverage that helps homeowners protect their investments and possessions from unexpected events and liabilities.
Is Homeowners Insurance the Same as Hazard Insurance?
There is a distinction between hazard insurance and home insurance. Hazard insurance is more narrowly focused on the dwelling coverage aspect of a policy. In contrast, homeowners insurance serves as a comprehensive umbrella, encompassing dwelling coverage, personal property protection, liability coverage and additional living expenses.
Do You Need Hazard Insurance?
Hazard insurance is not just a smart choice; it's an essential safeguard for homeowners as it protects your most valuable asset, which is your home. It would help if you had it simply because knowing you have hazard insurance provides peace of mind, allowing you to focus on enjoying your home without worrying about unexpected disasters
When you purchase home insurance, hazard insurance is included by default. Here’s why it’s necessary:
Protect Against Specific Risks
Hazard insurance shields the structure of your home from specific hazards or perils like fires, storms, theft and vandalism. Without it, you could face substantial financial losses if these events occur.
Safeguards Your Investment
Your home is a significant financial investment. Hazard insurance ensures that if the worst should happen, you won't be left shouldering the burden of repair or replacement costs on your own.
Lender Requirement
If you have a mortgage, your lender will likely require hazard insurance to protect their interest in the property. Failure to maintain this coverage could jeopardize your loan.
How Does Homeowners Insurance Work?
Homeowners insurance protects you and your property from various risks and financial liabilities. There are several situations that might require one or all of your homeowners insurance coverages. Typically, homeowners insurance provides coverage for the following key aspects:
Coverage Type | What It's Meant For | Example Scenario |
|---|---|---|
Dwelling Coverage | Repairs or rebuilding of your home from the ground up in case of damage. | Your policy covers the repairs if a tree falls on your roof during a storm. |
Personal Property | Replacement or repair of belongings. | Stolen TVs or damaged furniture are covered by your homeowners insurance. |
Liability Protection | Legal and medical costs. | If a guest slips and falls on your icy driveway and files a case, your legal fees are covered as well as their medical costs. |
Loss of Use Coverage | Temporary housing and living expenses during home repairs. | If you can't stay at home due to fire damage, your additional living expenses, such as relocating costs, hotel costs, and more, are shouldered by your insurance. |
Imagine a scenario where a severe thunderstorm causes a tree to crash through your home's roof, causing substantial damage. In this situation, your dwelling coverage would cover the cost of repairing or rebuilding your damaged roof, and your personal property coverage would also help replace or repair the damaged belongings within your home, such as furniture and electronics, that were affected by the incident.
If, by chance, a guest was injured during the incident, your liability coverage would assist with their medical bills and any legal expenses if they decide to file a lawsuit. Additionally, if the damage is so severe that you can't live in your home during repairs, your loss of use coverage would cover the cost of temporary housing and other living expenses, ensuring you have a place to stay while your home is restored.
How Much Does Homeowners Insurance Cost?
The cost of homeowners insurance can vary significantly based on multiple factors, with dwelling coverage or hazard insurance being a primary driver of expense. For instance, for a home with $100,000 in dwelling coverage, the average annual cost is $1,518, but this can change depending on location, property type and other variables.
Let's consider a home with a higher dwelling coverage value to put this into perspective. For a property with $750,000 in dwelling coverage, the average annual premium can be around $6,139 or more. Compare the costs for each dwelling coverage limits:
Data filtered by:Results filtered by:
Coverage:
- $100K Dwelling / $50K Personal Property / $100K Liability
- $250K Dwelling / $125K Personal Property / $200K Liability
- $500K Dwelling / $250K Personal Property / $300K Liability
- $750K Dwelling / $375K Personal Property / $500K Liability
- $1MM Dwelling / $500K Personal Property / $1MM Liability
Coverage:$100K Dwelling / $50K Personal Property / $100K Liability
| $100K Dwelling / $50K Personal Property / $100K Liability | Average Annual Premium$1,518 |
The average cost of home insurance may also vary based on different factors such as location, construction type, age of structure, deductibles and other considerations. Understanding how rates may fluctuate can help you make informed choices regarding your policy. For instance, it can also vary by company.
State Farm is the cheapest home insurance for $100,000 and $500,000 in dwelling coverage, offering $1,026 and $3,126 respectively. While Nationwide is the next affordable option for a lower dwelling coverage, Farmers and Allstate offer cheaper premiums for a higher dwelling coverage.
Examine the table below to see how company and dwelling coverage rates can change.
Data filtered by:Results filtered by:
Coverage:
- $100K Dwelling / $50K Personal Property / $100K Liability
- $250K Dwelling / $125K Personal Property / $200K Liability
- $500K Dwelling / $250K Personal Property / $300K Liability
- $750K Dwelling / $375K Personal Property / $500K Liability
- $1MM Dwelling / $500K Personal Property / $1MM Liability
Coverage:$100K Dwelling / $50K Personal Property / $100K Liability
| State Farm | Annual Premium$1,026 |
| Nationwide | Annual Premium$1,236 |
| Farmers | Annual Premium$1,242 |
| Allstate | Annual Premium$1,449 |
| Travelers | Annual Premium$3,674 |
FAQ
Understanding the other names for home insurance is essential when you’re looking for a policy. While it’s also known as hazard insurance, knowing the difference is the key to finding a policy for your needs. To help you learn about other names for homeowners insurance, take a look at our answers to some of the most frequently asked questions.
Is hazard insurance included in homeowners insurance?
Yes, hazard insurance is typically included as a component of homeowners insurance. The term hazard insurance is often used interchangeably with dwelling coverage, which is a core part of a homeowners insurance policy. It protects against specific hazards or perils, such as fire, storms, vandalism or theft, for the structure of your home.
Where can I get hazard insurance?
Hazard insurance, also known as dwelling coverage, can be obtained through various insurance providers. You can find hazard insurance policies at major insurance companies like State Farm, Farmers, Allstate and many others. These well-established insurance companies offer a range of coverage options to suit your needs. You may also explore local insurance companies and independent agents who can provide hazard insurance tailored to your specific property and requirements.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
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