What is hazard insurance?
All insurance is designed to help a person make the necessary payments when he suffers a calamity the expenses of which are too great to bear all at once on his own. Sometimes that calamity is a natural disaster that causes damage to his greatest single investment: his home. Naturally, there’s a form of hazard insurance to protect against just such an occurrence.
A policy that protects the insured against loss due to fire, wind or certain natural disasters in exchange for a premium paid to the insurer. It is also known as home owner’s insurance or fire insurance. If a catastrophe does happen, hazard insurance should cover the costs to rebuild your home. Most Lenders often require you to get a policy before you buy or refinance a home and usually require you to pay the first year’s premium at settlement.
