Hazard insurance is coverage that protects a homeowner and/or business owner against physical damages caused by unexpected and sudden events such as fires, severe storms, and other events. The homeowner or business owner will receive compensation to cover the cost of any damage incurred if the specific event is covered by the insurance policy.
Hazard insurance v. catastrophe insurance:
- Hazard insurance is a section of a standard homeowners insurance policy that protects the home/building's structure.
- Catastrophe insurance is a standalone policy that covers specific types of disasters, including those caused by humans.
[Last updated in March of 2022 by the Wex Definitions Team]