Hazard Insurance: Coverage, Cost & Exclusions (2026 Guide)

Hazard insurance covers the cost of repairs or rebuilding your home’s structure if it’s damaged by covered perils such as vandalism or windstorms.

Hazard coverage is one of the most common types of home insurance you’ll see on a homeowners policy. It’s required by lenders on rental properties and mortgaged homes.

We go over the basics of hazard insurance for your home, from covered perils and policy exclusions to the cost. If you want affordable hazard insurance quotes for your policy, enter your ZIP in our free tool.

How Hazard Insurance Works

If the physical structure of a home is damaged by a covered peril, hazard insurance will help pay up to the policy amount for the repairs or rebuilding.

In most cases, hazard coverage is often included in standard homeowners insurance policies.

It’s important to check the terms and conditions of your policy for specifics, because hazard insurance isn’t a catch-all for all perils that cause structural damage to a home.

Familiarizing yourself with the exclusions in your hazard insurance policy will help ensure there are no gaps in your coverage.

For specific exclusions, you may want to add some endorsements, especially if you need insurance for high-risk homes.

Even the best hazard insurance won’t cover every possible risk, so shop around to find the policy and coverage options you need.

Perils Covered and Excluded by Hazard Insurance

There are several types of events covered by hazard insurance, including a range of natural disasters and human-caused damage.

Weather-related incidents covered by hazard insurance include ice buildup that results in roof collapse and structural stress caused by snow and freezing conditions. Wind-related damages will also fall under hazard insurance coverage.

Hazard insurance will also cover damages from theft or vandalism, some plumbing issues, and impacts from vehicles or aircraft.

For example, if the pipe to your walk-in tub bursts, hazard insurance will cover the cost of repairs. Read More: Walk-In Tubs & Home Insurance

While hazard insurance covers a wide range of incidents that cause damage to a home’s structures, there are some things that will be excluded from your policy.

Hazard Insurance: What’s Covered vs. Excluded

For example, homeowners will need to add earthquake endorsements to their home insurance policy, as this is otherwise excluded under a typical hazard policy.

If you have an older sewer system, for instance, you may want to add a rider onto your hazard insurance.

While intentional acts of damage for insurance fraud are an obvious exclusion, homeowners may be surprised to learn that issues such as foundation settling or hidden mold won’t be covered by hazard insurance.

Damage from flooding, pests or rodents, and home office work is also excluded from a typical hazard policy.

Comparing the Cost of Hazard Insurance

What affects rates for hazard home insurance? How much you’ll pay for hazard insurance depends on multiple factors, like the value of your home and your claims record. Learn more in our guide to home insurance rates.

It is important to note that hazard home insurance calculates costs based on the rebuild value of your home, such as construction materials, not the resale market value of your home.

Other factors used by hazard insurance calculators include your credit score, deductible amount, and safety features.

Installing home safety features, such as gas and smoke detectors, can lower your average hazard insurance cost. However, policyholders living in a low-disaster-risk area will automatically have more affordable rates.

How Home Value Affects Hazard Coverage Rates

If your home has a higher value, insurance companies will charge you more for hazard insurance. See More: Best Home Insurance for High-Value Properties

Higher rates will help insurance companies offset the cost of rebuilding or repairing your more expensive home, especially if it has custom features or materials.

It is important to purchase the right amount of protection for repairs. Insurance experts recommend purchasing a policy that covers at least 80% of your home’s rebuilding cost.

If you own a more expensive home, therefore, you’ll have to pay more for a higher coverage amount to meet that 80%.

Hazard Insurance Rates by Coverage Amount ($1K Deductible)

A $1 million hazard insurance policy, for example, will cost an average of $136 more per month than a $200k policy.

No matter what policy coverage amount you need for your home, shopping around for quotes can help you find the most affordable rate.

Important Details: How to Compare Home Insurance Quotes

Using Deductibles to Save Money on Hazard Insurance

There are several different insurance deductibles to choose from for a hazard insurance policy.

If you choose a higher deductible, you are committing to taking on more financial responsibility by paying more for repairs. While this will lower your rates, it means you will have to pay more out of pocket.

Hazard Insurance Rates by Deductible Amount

If your home is in a low-risk area and you are unlikely to file a claim, you may want to raise your deductible to save on your coverage.

Just make sure that the deductible amount is still one you feel comfortable paying out of pocket.

For instance, while a $5,000 deductible may seem attractive at first because it lowers rates to an average of $78 per month, customers should be prepared with $5,000 of savings.

Otherwise, customers will be stuck with a damaged home until they can raise the deductible money to finish repairs.

Hazard Insurance Prices at Top Companies

The coverage amount and deductible you pick for your hazard insurance policy are just a few of the factors that influence rates.

The company you choose for your hazard insurance policy also plays a role in what you’ll pay for coverage.

Some hazard insurance companies that tend to be cheaper in general include Geico and Progressive.

When reviewing Geico, we found it also offers affordable auto insurance that can be bundled with home insurance coverage.

Hazard Insurance Monthly Rates by Provider

At other top-rated companies like State Farm and Farmers, you’ll pay a bit more on average for hazard coverage.

However, these companies offer perks like extended dwelling coverage or extended replacement cost for homes.

How Location Impacts Hazard Insurance Premiums

Regional disaster risk will play a major role in rates, especially in states with high natural disaster risk. Read our article for more details: Home Insurance Rates by State

For example, states like California or Texas, which face significant wildfire risk, have some of the highest hazard insurance rates.

Homeowners may even struggle to find hazard coverage because insurance companies limit the number of policies they write due to the increased likelihood of expensive claims.

States with lower regional disaster risks, like Pennsylvania or Utah, will have lower rates for hazard insurance. This is because companies are less likely to have to pay out on expensive claims in states with fewer natural disasters.

Filing Hazard Insurance Claims

Hopefully, you’ll never have to make a claim on your hazard insurance policy, but hazard insurance provides important home protection financially if you do end up needing it.

Common insurance claims that homeowners file with hazard insurance range from fire claims to falling debris claims.

Theft hazard claims account for 6% of insurance losses. Insurance may charge you more if you live in an area with higher crime rates.

Fires are the leading cause of insurance losses, accounting for 26% of claim losses. See More: How to File a Wildfire Home Insurance Claim

Fires also cause insurance companies some of the most expensive losses in hazard insurance.

Windstorms cause the second-most expensive losses that insurance companies have to pay out, followed by water leaks.

Explosions, lightning, and hail are also causes of costly insurance losses for insurance companies.

These hazards can cause major structural damage, including broken windows, electrical fires, and more.

Hazard Insurance on Home Insurance Policies

Confused about hazard insurance vs. homeowners insurance? Hazard insurance is a component of a home insurance policy, and only protects the structure of a home.

This coverage is added onto a home insurance policy, along with coverages like personal liability or property damage coverage.

Hazard Insurance vs. Homeowners Insurance: Key Differences

A full homeowners insurance policy, however, includes basic coverages that protect a customer’s belongings, provide coverage against lawsuits for guest injuries, and more.

You can also add on coverages to a basic home insurance policy to help pay for living expenses if your home is uninhabitable, the rebuilding of fences, and other extra protections.

Wondering if you need to carry hazard insurance on your home insurance policy? In most cases, you are required to have hazard insurance on a policy.

If you have a mortgage on your home, or want to refinance your mortgage, your lender will require hazard insurance. You may also need hazard insurance if you are a landlord who owns a rental property.

The only time you won’t need hazard coverage is if your home is paid off. However, it is still highly recommended to carry hazard coverage to protect yourself financially.

Protect Your Dwelling With Hazard Insurance

Hazard insurance is an essential part of any homeowners insurance policy and is generally included in all standard policies.

The majority of lenders require this coverage because it protects lenders and homeowners financially in the event of a disaster, such as a fire or falling debris from a windstorm.

If you are looking to protect your home with hazard insurance today, comparing quotes can help you score the best deal. See More: Cheapest Home Insurance Companies

Compare home insurance rates from companies in your area today by entering your ZIP in our free tool.