What Is Hazard Insurance?
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What Is Hazard Insurance?
Hazard insurance is a type of property insurance that covers damage to a home caused by very specific hazardous events or natural conditions. Hazard insurance is sometimes referred to as “homeowner’s insurance.” However, homeowner’s insurance is generally considered a very broad type of insurance and may not cover all types of damage to the home. Thus, the term “hazard insurance” has been adopted to refer to more specific types of policies.
As such, a homeowner may often choose to purchase hazard insurance in addition to or “on top” of their basic homeowner’s insurance policy. Payment terms and rates will vary depending on the individual company as well as the homeowner’s specific needs.
What Does Hazard Insurance Cover?
One of the reasons why general property insurance policies do not cover every conceivable type of hazard is that some hazards are more prevalent than others depending on the location of the property, and it is too costly for an insurance company to include covering that type of common hazard in a general homeowner’s policy.
For instance, beach-front property may be more susceptible to hurricanes and tropical storm weather, and homes located near a fault line may be more exposed to earthquake threats. Since these types of hazards are more common, property owners often have to get hazard insurance that deals with that specific type of potential harm in addition to general homeowner’s insurance.
Hazard insurance may cover damage caused by:
- Fires, especially wildfires
- Storms, such as tornadoes and hurricanes
- Landslides and erosion
Some hazard insurance policies may cover a mix of different hazard risks, depending on the region. Also, some types of policies only cover very specific types of damage. For instance, flood insurance might have limited coverage for underground structures.
What Are Some Common Hazard Insurance Legal Disputes?
Like any insurance policy, a hazard insurance policy can be linked to various types of legal disputes or conflicts. Since hazard insurance is often tailored to the homeowner’s specific needs, the insurance contract can be subject to much negotiation between the policy holder and the insurance company or agent. Some common legal disputes that can arise may include:
- Discrimination (i.e., denying or withholding coverage based on the applicant’s age, race, sex, or nationality)
- Attempts to claim incidents outside of normal hazard insurance coverage or attempts to claim damage caused by the homeowner’s own negligence
- Fraud or misrepresentation
- Breach of an insurance contract term such as defaulting on a monthly payment
Legal consequences for a violation or dispute generally involve some sort of economic damages award. This will be aimed at compensating the non-violating party for financial losses which were directly caused by the breach. More severe remedies may include a loss of operating license or a fine if an insurance agent violates industry standards. Suing an insurance company can be a complicated endeavor and may require the assistance of a legal professional.
Should I Hire a Lawyer for Help with a Hazard Insurance Legal Dispute?
Hazard insurance can provide additional coverage for homeowners whose property is exposed to specific types of risks. Such insurance policies can often be complex and may also be subject to adjustments over time. You may need to hire a real estate lawyer in your area if you need any assistance with a hazard insurance contract. Your attorney can help explain terms plainly so that you understand your rights and options under the agreement. If you encounter any legal issues or disputes, your lawyer can help file a lawsuit if needed and can help you seek damages in a court of law.
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Last Modified: 07-07-2015 10:12 AM PDT
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