Hazard Insurance vs Homeowners Insurance in Florida


Floridians are no strangers to dangerous weather. In fact, each year Florida experiences more thunderstorms than any other state in the United States, and with those storms comes the potential for lightning, strong winds, and even tornadoes, all of which can seriously harm the structural integrity of your home. Of course, Florida also experiences more hurricanes than any other state, which means that Florida’s homeowners need to take extra care to protect their property from natural disasters.

One of the most important decisions a homeowner can make is choosing a homeowner’s insurance policy that fits their needs and adequately protects their investment. And, as you might imagine, there is no silver bullet for choosing the “right” policy – what works for someone else may not work for you. When making your decision we recommend consulting a trusted attorney to help you review your policy to ensure that it meets your needs.

Is hazard insurance the same as homeowner’s insurance?

As you are closing on your newly purchased home, your mortgage lender will likely require you to purchase hazard insurance to protect your property; after all, it is also an investment for your lender. Upon hearing about this requirement, you may be wondering what the difference between homeowners insurance and hazard insurance is, and why your bank is asking you to purchase the latter.

Hazard insurance is a specific portion of a homeowner’s insurance policy which protects your home from hazards that are covered in your policy.  So, is it the same as homeowner’s insurance? The answer is generally yes, but it is a bit more complicated than that.

What is Hazard Insurance?

Hazard insurance is coverage that protects you, the property owner, against damage to your home caused by natural events such as fires, severe storms, lighting, snow, among other hazards, often referred to as “perils.” As a property owner who has purchased hazard insurance, you are entitled to compensation for any damage to your home caused by weather events outlined in your insurance policy.

Before signing your policy, you should check to make sure that hazards specific to where you live are covered by your hazard insurance, in addition to common hazards such as fire. For example, as a Florida resident you will likely want to ensure that your hazard insurance will cover damage to your home caused by lighting or hurricanes. On the other hand, your policy may not need to cover damage caused by snow.

All of this may sound like homeowner’s insurance, and for the most part it is. However, hazard insurance differs in that it only covers damage to the structure of your home and the surrounding construction, such as your garage. It does not cover personal items found inside your home.

Finally, it should be noted that in areas that are prone to natural disasters, like Florida which experiences more hurricanes than other states, homeowners may also elect to take out separate or additional hazard insurance policies to cover specific contingencies such as flooding.

Am I required to purchase hazard insurance?

Mortgage companies will often require a homeowner to have purchased homeowner’s insurance as well as a hazard policy to protect your property, and their investment. Generally, lenders will be satisfied with the purchase of a standard homeowners insurance policy, but in some cases, such as if you live in an expensive home in an area prone to natural disasters, they may require you to purchase additional hazard insurance.

What is homeowner’s insurance?

Homeowners insurance protects your home and your possessions inside it against damage and theft. Nearly all mortgage companies require a borrower to have an insurance policy that covers the value of the property, and in fact, many will not offer a loan without proof that you have purchased insurance.

Although your homeowner’s insurance policy will be unique to you, depending on the kind of coverage you need and the value of your property, it can be broken down into a few standard elements:

  1. A home insurance policy will cover damage to the interior and exterior of the house in the event of a fire, hurricane, or other covered disaster. Depending on the type of coverage you buy, your insurer will compensate you so you can repair or rebuild your home in the event it is damaged. This type of policy will also cover personal items such as clothing, furniture, and appliances. However, it should be noted that damage caused by floods may require an additional rider to receive coverage should your home flood.
  • The liability coverage in your homeowner’s insurance policy will protect you from lawsuits should someone get injured while they are on your property. For example, if someone slips and falls on the steps in your home, your insurer will pay their medical expenses, as well as any lost wages that they may be entitled to.
  • Finally, in the unfortunate event that you must vacate your home, a homeowner’s insurance policy could cover a stay in a long-term hotel while you wait for your home to be repaired. This part of the policy is known as “additional living expenses” and can be a lifesaver for people who suffered through a traumatic event such as a fire or hurricane that destroyed their home.

Which policy is better to carry?

In Florida, state law does not require you to have purchased homeowner’s insurance. However, to avoid homeowner’s insurance, you will need to own your home outright, as many mortgage lenders require you to purchase insurance before lending. We do not advise foregoing homeowner’s insurance, even if you are not required to purchase a policy. 

Homeowners insurance and hazard insurance provide coverage for different pieces of property. Hazard insurance protects you from the costs of damage to a home’s physical structure, while homeowners protects your home and possessions from damage and theft. Both policies come together to provide comprehensive coverage against the costs of unexpected damage to your home or personal property.

Consult an experienced attorney

At Johnson & Williams PA, we have made it our mission to provide sound legal advice to the Orlando community. Put our skill to work for you. Our attorneys have the knowledge and experience to help you navigate the complex process of purchasing a home. To schedule a time to discuss your needs, please contact us online or call Johnson & Williams, P.A. at (407) 245-1268 to set up a consultation.