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"Hazard insurance" is a type of insurance that protects real property against damage caused by certain risks, such as fire, theft, and natural disasters. It is typically required by most mortgage lenders to protect their investment in the property and ensure that the collateral is not damaged or destroyed. If a property owner experiences a covered loss or damage, the insurance company will typically provide financial compensation to help cover the cost of repairs or replacement.
For example, let's say a homeowner has hazard insurance on their property, and a fire breaks out and damages the home. The homeowner would file a claim with their insurance company, and the insurance company would then investigate the claim and provide financial compensation to help cover the cost of repairing or rebuilding the damaged property.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
Hazard insurance, oh what a thing,
It protects your property, like a magical ring.
From fires and floods, and other such woes,
It keeps your real estate safe from those foes.
Most lenders require it, to protect their loan,
And ensure that the property stays in a safe zone.
If damage occurs, like from a big storm,
The insurance will cover, and help to reform.
So if you own a property, remember this rule,
Hazard insurance is your friend, and can help you stay cool!