HOME HAZARD INSURANCE

 An insurance policy to protect home owners against property damage

Lenders require that you get hazard insurance policy before you buy or refinance a home.

Hazard insurance shields you against property damages caused by a fire or a severe storm. If you live in an area that's prone to natural disasters, like earthquakes and floods, you might need a separate policy. If a catastrophe does happen, hazard insurance should cover the costs to rebuild your home. You have to pay for first year of hazard insurance on the closing date. The lender may also require that you deposit up to 2 months of premiums into an escrow account.

Living in a reputable neighborhood is not enough to prevent damage to your home or property. A lot of people adhere to the fallacy that crime only occurs in the bad part of town.