Hazard InsuranceFinancial Dictionary -> General Finance -> Hazard Insurance
Hazard insurance is also commonly known as home insurance, property insurance or homeowner's Insurance.
The cost of Hazard Insurance varies and is commonly based on the current value of the property and how much it would cost to replace said property should it be completely destroyed by a hazard. This cost is added on to any extras on the policy, such as content insurance (insurance on items inside the house), and then a risk factor is applied, depending on the likelihood of a hazard taking place.
A basic example is of a house located near an active volcano. The likelihood of it getting damaged by the volcano is higher than a regular home and thus if volcanoes were covered the policy would cost more, because they are more likely to have to pay out. Homeowners who live in regions where natural disasters are common, or more likely to occur than elsewhere, insurance companies are more reluctant to give them a policy. This results in higher premiums, so it is not uncommon to get insurance and completely remove cover for the most likely disaster, to bring down costs.
If you can prove to the insurance company that your home is more secure than the average property, you can lower your premiums. For example having burglar alarms, smoke alarms and fire retardant items make you less of a fire risk.