What type of insurance is used to protect against hazards in residential real estate?

Hazard insurance is specifically designed to provide coverage for risks associated with damage to residential real estate properties caused by various hazards, such as fires, storms, theft, and other potential damages. This type of insurance is often included under a broader category known as property insurance, but hazard insurance specifically refers to the risks associated with physical damage to the property itself.

It serves as a crucial component in protecting homeowners and lenders alike, as it ensures that the property can be repaired or rebuilt in the event of a loss, thus maintaining its market value. In the context of mortgage lending, lenders may require borrowers to hold hazard insurance as a condition for approving a loan to ensure that their investment is safeguarded against potential damages.

While property insurance also encompasses similar protections, it can include additional coverages beyond just hazards. Loan default insurance and title insurance serve different purposes, focusing on the ability to pay back the loan and the transfer of property ownership, respectively, rather than protecting against physical damage to the property.