What does hazard insurance protect against?

Hazard insurance is specifically designed to protect property owners from significant losses that can occur due to damages caused by events such as fire, storms, theft, and other natural disasters. This type of insurance typically covers the structure of the home as well as some personal belongings within it. The main purpose is to provide financial protection so that if a covered event occurs, the homeowner can repair or rebuild their property without incurring devastating financial burdens.

In contrast, the other options pertain to different types of risks that are not covered by hazard insurance. Economic downturns, loss of income during unemployment, and depreciation of property value are related to economic factors and personal circumstances rather than physical damage to the property itself, and would necessitate different types of insurance or financial planning strategies. Thus, hazard insurance is crucial for safeguarding against tangible risks associated with physical damage to a property.