Updated: September 5, 2025
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Hazard insurance is also known as dwelling coverage or coverage A.
Hazard insurance pays to repair or rebuild your home after covered perils like a fire, lightning, theft or vandalism.
Hazard insurance is a part of homeowners insurance policies and cannot be bought alone.
Hazard insurance, often called dwelling coverage or Coverage A, is the part of your homeowners insurance policy that covers the cost to repair or rebuild your home’s physical structure after certain disasters. This includes the walls, roof and foundation of the house. It’s not a separate policy you can purchase on its own; instead, it’s automatically included in standard homeowners insurance policies.
Hazard insurance is not a separate policy but a part of homeowners insurance that covers your home’s structure, often called dwelling coverage. On the other hand, a standard homeowners policy also includes protections beyond hazards, such as personal property, liability and loss of use coverage. In short, hazard insurance is one piece of the broader protection you get with homeowners insurance.
Home insurance policies generally fall under two types of coverage: named perils and open perils. Named perils protect your home only against specific risks listed in your policy, while open perils cover everything except the exclusions spelled out in your contract.
In both cases, hazard coverage applies to sudden, accidental events that can damage or destroy your home’s structure. Here are some of the most common examples.
Coverage includes events such as fire, lightning, windstorms, hail and even volcanic eruptions. These natural perils can cause significant structural damage, making them core protections under hazard insurance.
Sudden events like burst pipes, electrical surges or the weight of snow and ice on your roof are typically covered. Because these are unpredictable, insurers recognize them as insurable risks.
Theft, vandalism, riots and damage caused by vehicles or aircraft are also part of standard coverage. These protections extend beyond natural events, guarding your home against man-made hazards.
Even though hazard insurance offers broad protection, there are specific exclusions that require separate policies or maintenance on your part. Understanding these gaps helps you avoid costly surprises when filing a claim.
Floods and earthquakes are the two most common exclusions. Homeowners in high-risk areas typically need to purchase separate policies to protect against these events.
Issues like mold, rot, infestations or gradual deterioration are not covered. These are considered preventable through proper upkeep, so they fall on the homeowner’s responsibility.
Losses caused by war, nuclear hazards, government action or intentional damage are not insurable under a hazard policy. These exclusions reflect risks outside the scope of standard homeowners coverage.
Imagine you have $200,000 in hazard insurance. If a fire causes $180,000 in damage and your deductible is $2,000, your insurer would pay $178,000. This ensures your home can be restored without leaving you responsible for the full financial burden.
The cost of a hazard insurance policy varies per person. On average, it can be between $1,671 and $2,054 per year, depending on the insurance provider.
Company | Dwelling Coverage $250K and Personal Property $50K |
|---|---|
Allstate | $1,671 |
Chubb | $1,676 |
Nationwide | $1,719 |
USAA | $1,800 |
Travelers | $1,850 |
State Farm | $1,946 |
Farmers | $2,054 |
**NOTE: The rates above are averages based on a homeowners policy with $250,000 of dwelling coverage and $50,000 of personal property. Actual rates may differ. Talk with several insurers and compare home insurance quotes based on your specific home and personal factors.
Many insurance companies offer hazard insurance as part of their homeowners insurance policies. USAA is MoneyGeek's top pick for hazard insurance. Next is State Farm. Learn more about the best hazard insurance companies below.
**NOTE: Although USAA has the highest MoneyGeek score, it's only available to active military, veterans and their families.
The price of hazard insurance isn’t the same for every homeowner. Insurers consider several factors about your home and your personal profile when calculating rates.
You can’t purchase hazard insurance on its own; it’s built into a standard homeowners insurance policy. To get coverage, you’ll need to shop for homeowners insurance and make sure the dwelling coverage portion meets your needs.
Start by estimating how much it would cost to rebuild your home if it were a total loss. This figure will help guide the level of dwelling coverage you should look for.
Insurers will ask about your home’s age, size, construction type and safety features. They’ll also review your credit history and claims record to help determine your rates.
Compare home insurance quotes from at least three different insurers to see how coverage and pricing differ. This will help you find the best balance between cost and protection.
Beyond price, consider financial strength ratings and customer satisfaction scores. Strong ratings give you confidence that the company can pay claims reliably.
Once you choose a policy, your insurer will issue documents showing your hazard insurance coverage. Your mortgage lender will require this proof before finalizing your loan.
The amount of hazard insurance you need depends on your home’s unique characteristics and potential risks. Factors like local building costs, the type of materials used in construction and your home’s overall size and features all play a role in determining the right level of coverage. A licensed agent can help calculate an amount that ensures your home is fully protected.
Your mortgage lender will also set minimum hazard coverage requirements to safeguard their investment. Lenders typically require enough coverage to rebuild the home in case of a total loss. This means your hazard insurance amount isn’t just about your preferences — it must also meet the standards set by your loan provider.
Hazard insurance, also known as dwelling coverage, is the part of homeowners insurance that protects your home’s structure against risks like fire, wind or vandalism. It doesn’t cover every event, with common exclusions including floods, earthquakes and normal wear and tear.
The cost depends on factors such as your home’s age, size, construction materials, location and your insurance history. Because most lenders require enough coverage to rebuild your home after a total loss, hazard insurance is an essential part of securing and maintaining a mortgage.
Understanding the difference between hazard insurance and homeowners insurance can be confusing at first, but these frequently asked questions can help clear up the confusion.
Hazard insurance is part of homeowners insurance. Hazard insurance covers the actual structure of your home. Homeowners insurance policies, which include hazard insurance, provide comprehensive coverage for your home. You cannot purchase hazard coverage as a standalone policy.
While no laws require you to purchase hazard insurance, if your home is financed, your mortgage lender most likely will require you to buy it to protect their investment.
Homeowners insurance, which includes hazard insurance, is considered a personal expense and is not tax-deductible.
As part of a homeowners insurance policy, hazard insurance is coverage that pays for repairs to (or the reconstruction of) your home due to damage or loss.
You need both hazard insurance and homeowners insurance becasue hazard insurance is a component of homeowners insurance. Hazard insurance, otherwise known as dwelling coverage, is included by default in standard homeowners insurance policies
To rank the top home insurance companies for hazard insurance, MoneyGeek calculated a unique score for each company using premium data for companies offering service in more than 35 states on average. This data includes J.D. Power for customer service, AM Best for financial stability and Quadrant Information Services for affordability.
MoneyGeek sourced pricing information from Quadrant Information Services to calculate the average cost of hazard insurance on both a state and national level. Using a homeowners insurance policy with $250,000 in dwelling coverage and $50,000 of personal property, the scores are on a scale of 0 to 100 on the national level.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
