Hazard Insurance for Homeowners in California

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Hazard Insurance for Homeowners in California

Hazard insurance helps protect your home against a number of common risks, including fires, theft, vandalism, and more. For homeowners in California, hazard insurance is essential as it can help pay to repair damages caused by wildfires.

Hazard insurance refers to the coverages in your homeowners insurance policy that protect your property against damages caused by common hazards. Not only can hazard insurance help you recover after a wildfire or another disaster, but it’s also required by most mortgage lenders, making it a necessity for anyone who wants to purchase a home.

Here’s what homeowners in California need to know about hazard insurance.

What is Hazard Insurance?

Hazard insurance is an umbrella term that includes the coverages in your homeowners insurance policy that protect your home against common disasters. Typically, when someone says hazard insurance, they are referring to the coverages that protect your home’s structure — not liability coverage.

Most mortgage lenders require homeowners to have a minimum amount of hazard insurance in order to be approved for a loan. Hazard insurance can’t be purchased as a standalone policy, though. It can only be purchased as part of a standard home insurance policy.

What Does it Cover?

Your homeowners insurance policy will state which hazards are covered, so be sure to review your policy’s declarations page to learn more about what perils you are protected against.

Typically, hazard insurance covers several common perils, including:

  • Fire and smoke
  • Hail
  • Windstorms
  • Lightning
  • Theft
  • Vandalism
  • Falling objects
  • Explosions

Hazard insurance generally does not cover damage caused by floods or earthquakes. Depending on your location, you may want to consider purchasing separate policies to cover these hazards.

Does hazard insurance cover wildfires?

Yes, fires, including wildfires, are one of the hazards typically covered by homeowners insurance and hazard insurance.

For homeowners in California, this coverage is particularly important as it can help them recover from damages caused by wildfires. Not only can your homeowners insurance policy help pay to repair or rebuild your home, but it can also help you replace your damaged personal belongings and cover temporary living expenses if you are forced to evacuate your home.

Homeowners Insurance Coverages

A standard homeowners insurance policy includes three different coverages that can help protect your home against hazards like wildfires, including dwelling coverage, other structures coverage, and personal property coverage.

Your policy should also include loss of use coverage, which can help cover your temporary living expenses if a covered hazard forces you to temporarily live elsewhere. While loss of use coverage isn’t typically considered hazard insurance, it does offer additional financial support homeowners need to recover after a disaster.

Dwelling coverage

Dwelling coverage protects the physical structure of your home against damages caused by covered hazards.

If a wildfire, for example, destroys your home, dwelling coverage can help pay to repair or rebuild your home. To ensure you have enough dwelling coverage to rebuild your entire home, you should choose a replacement cost value policy over an actual cash value policy. The former pays to rebuild your home based on the current cost of construction and building materials, while the latter covers your home up to its depreciated value.

Other structures coverage

Other structures coverage protects your home’s detached structures against a variety of common hazards. Detached structures may include detached garages, fences, decks, patios, and sheds that aren’t a part of your home’s primary structure.

Personal property coverage

Personal property coverage protects your personal belongings, including appliances, furniture, electronics, clothing, jewelry, valuables, and other items. This coverage can help pay to replace your lost or damaged personal belongings after a covered hazard like theft, fire, or vandalism.

How Much Does Hazard Insurance Cost?

The cost of hazard insurance depends on several factors, including:

  • Location
  • Home age
  • Home construction
  • Home safety features
  • The value of your home
  • Coverage limits
  • Deductibles

In California, homeowners may find it difficult to find affordable homeowners and hazard insurance due to the increased risk of wildfires. As an alternative, California homeowners may consider getting coverage through a California FAIR Plan if they can’t find affordable coverage elsewhere.

More Ways to Protect Your Home Against Wildfires

Hazard insurance is a great way to cover your home against common hazards like wildfires, but homeowners should also be sure to implement preventative measures to protect their homes against fires.

Consider following these tips to protect your home against wildfires:

  • Remove flammable objects from around your home’s perimeter.
  • Regularly trim bushes, hedges, and trees to create more horizontal and vertical space between plants.
  • Install a roof sprinkler system to hydrate the exterior of your home and reduce the chances of ignition.
  • Regularly clean your roof and gutters.
  • Use fire-resistant building materials when applicable to harden your home against fires.

These steps can help make your home more resistant to wildfire damage, and in some cases, may make it easier to find affordable home insurance policies.