Legal Definitions - hazard insurance

Hazard insurance is a type of property coverage designed to protect the physical structure of a home or business from damage caused by sudden and unforeseen events. It provides financial compensation to the policyholder to repair or rebuild their property if it sustains damage from an event specifically covered by their insurance policy. This coverage is a fundamental component of most standard homeowners and commercial property insurance policies.

• Example 1: Residential Property Damage from a Falling Tree

  During an unexpected, strong windstorm, a large oak tree in a homeowner's yard snaps and falls directly onto the roof of their house, causing significant structural damage to the attic and upper floor.

  Explanation: The homeowner's hazard insurance would typically cover the costs to remove the fallen tree from the structure and repair the roof and internal damage. This illustrates hazard insurance protecting the home's physical structure from a sudden, unexpected natural event like wind damage leading to a falling tree.

• Example 2: Commercial Property Damage from a Burst Pipe

  A pipe suddenly bursts on the second floor of a small office building overnight, flooding the offices below and damaging walls, flooring, and built-in fixtures.

  Explanation: The business owner's commercial property insurance, which includes hazard coverage, would typically provide funds to repair the water-damaged parts of the building and restore the affected areas. This demonstrates hazard insurance protecting a business property from an unforeseen internal event causing physical damage to the building itself.

• Example 3: Building Damage from an Accidental Vehicle Collision

  A driver loses control of their car in a parking lot and accidentally crashes into the front wall of a local hardware store, causing structural damage to the building's facade and interior support beams.

  Explanation: The hardware store owner's hazard insurance would cover the expenses to repair the damaged wall and any other structural elements of the building affected by the collision. This shows hazard insurance protecting a property from physical damage caused by an external, unexpected incident.