What type of hazard insurance is accepted by Fannie Mae?

The correct choice focuses on the specific type of hazard insurance that is accepted by Fannie Mae, which is particularly relevant in regions that face unique risks, like Hawaii, where hurricanes may pose significant threats. While hurricane insurance, in this case issued by the Hawaiian Hurricane Relief Fund, is crucial for protecting properties against this specific peril, it's worth noting that Fannie Mae's requirements for hazard insurance primarily pertain to ensuring that properties are adequately covered against risks that could negatively impact their value and livability.

General hazard insurance typically refers to coverage that protects against a variety of perils, but it may not provide the specialized coverage that certain geographical areas require. Flood insurance is important in places prone to flooding; however, it operates independently of standard homeowner's hazard policies, and its necessity does not supersede the requirements for general hazard insurance as determined by Fannie Mae. Private mortgage insurance plays a completely different role, primarily serving to protect lenders against borrower default rather than providing property damage coverage.

In essence, Fannie Mae's standards take into account the specific insurance needs of properties, especially in areas susceptible to hurricanes. Thus, accepting a separate hurricane insurance issued by the Hawaiian Hurricane Relief Fund aligns with those requirements for adequate coverage in high-risk areas.