Hazard Insurance

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.

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.

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.

The cost of a hazard insurance policy varies per person. On average, it can be between $154 and $899 per month, depending on the insurance provider.

**NOTE: The rates above are averages based on a sample homeowner profile. Actual rates may differ. Talk with several insurers and compare home insurance quotes based on your specific home and personal factors.

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.

• Age of the Home: Older homes may cost more to insure because they often need updates or repairs that increase risk.
• Construction Materials: Homes built with brick or stucco may be cheaper to cover than those with wood, which is more vulnerable to fire.
• Roof Type and Condition: A durable roof made of metal or slate can lower your premiums compared to one with older shingles.
• Square Footage: Larger homes usually cost more to rebuild, leading to higher insurance costs.
• Safety Features: Security systems, smoke detectors and fire extinguishers can reduce premiums by lowering the chance of severe damage.
• Location: Homes in areas prone to wildfires, hurricanes or high crime may have higher premiums due to increased risk.
• Credit History: A strong credit record can help you secure better rates since insurers view it as a sign of financial reliability.
• Claims History: Frequent past claims can raise your costs, as insurers may see you as more likely to file again.
• Coverage Gaps: If you’ve gone without insurance before, insurers may charge more due to the perceived higher risk.

Many insurance companies offer hazard insurance as part of their homeowners insurance policies. USAA is MoneyGeek's top pick for hazard insurance, with AIG Insurance as the runner-up. Take a look at the best hazard insurance companies below with their average costs.

**NOTE: The rates above are based on a policy with $250,000 in dwelling coverage, $125,000 in personal property coverage and $200,000 in liability. Although USAA has the highest MoneyGeek score, it's only available to active military, veterans and their families.

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.

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 often 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.

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 $125,000 of personal property, the scores are on a scale of 0 to 100 on the national level.