Definition

Noun: * Insurance against specific perils: A type of property insurance that provides financial protection against damage or loss caused by explicitly named, or "hazardous," events. These typically include risks like fire, lightning, windstorms, hail, and explosions. It is a more limited form of coverage than "all-risk" insurance.

Usage

• Hazard insurance is a specific component of a homeowner's insurance policy, often referring to the section that covers the structure of the home itself from listed perils.
• It is a crucial requirement for obtaining a mortgage, as lenders need assurance the property is protected against common destructive events.
• The term is often used interchangeably with "dwelling coverage" or "perils coverage" within the context of a standard homeowner's insurance policy.

Examples

• The lender required proof of hazard insurance before approving the home loan.
• Our hazard insurance policy covers damage from fallen trees due to a windstorm, but not from flooding.
• After the kitchen fire, we filed a claim under our hazard insurance.

Advanced Usage

• "Named Peril" Policy: Hazard insurance is a classic example of a "named peril" policy, meaning it only covers the events specifically listed in the contract. This contrasts with "open peril" or "all-risk" policies, which cover all causes of loss except those explicitly excluded.
• In commercial contexts, hazard insurance may refer to specific coverage for business property against fundamental risks like fire and theft.

Variants and Related Words

• Homeowners Insurance (n): A broader package policy that typically includes hazard insurance (dwelling coverage), liability insurance, and coverage for personal property.
• Dwelling Coverage (n): The part of a homeowner's policy that protects the physical structure of the home; this is essentially the modern term for hazard insurance within a policy.
• Peril (n): The specific cause of a loss, such as fire, theft, or windstorm, which hazard insurance is designed to cover.

Synonyms

• Fire and extended coverage insurance (an older, specific term)
• Named-peril insurance
• Dwelling insurance (in context)

Important Notes

• Hazard insurance generally does not cover all potential risks. Common exclusions include flood damage, earthquake damage, normal wear and tear, and intentional loss. Separate policies or endorsements are needed for these perils.
• It is distinct from mortgage insurance, which protects the lender if the borrower defaults on the loan, and from liability insurance, which protects the homeowner if someone is injured on their property.

Noun

1. insurance that provides protection against certain risks such as storms or fires