What is a Peril?
In insurance, the source of a particular loss or damage is considered a peril. In that regard, a peril can be any number of hazards or events that lead to a claim. Often, insurance contracts use the term peril to describe what risks are covered under a particular policy.
Common perils in home insurance policies can include, but are not limited to, the following:
- Fires
- Lightning
- Windstorms
- Hail
- Riots or civil commotion
It should be noted that not all perils are covered in a given policy. For instance, while an earthquake is considered a peril, it may be excluded from a residential insurance policy. Homeowners would need dedicated earthquake insurance in this instance. This is important when understanding your insurance and what is or isn’t covered.
That’s where named and open perils come into play.
Named and Open Peril Policies: Which One is Right for You?
There are effectively two types of homeowner policies to be aware of to ensure you are appropriately covered:
- Named peril insurance policies—Coverage kicks in only following losses from perils or damages named explicitly in the policy itself. This often includes fire, theft, falling objects, and vandalism. Essentially, if the policy doesn’t specify whether or not a given peril is covered, it likely isn’t. Under these policies, the burden of proving that a named peril caused a loss lies on the insured.
- Open peril insurance policies—These policies (sometimes called all-risk or all-peril policies) provide coverage for all perils except those expressly excluded in the policy itself. While often more expensive than named peril policies, open peril policies are more comprehensive and usually have higher limits. In addition, under these policies, the burden is on the insurance company to prove whether a peril is excluded. Exclusions may vary by policy but generally apply to perils that require standalone insurance or are altogether uninsurable.
The type of policy that’s right for you will depend on your specific situation. For instance, those that live in natural disaster-prone regions will need a different kind of policy than those in lower-risk areas. When determining what coverage to elect, it’s a good practice to inventory your property and assess the most common risks to your home. An InsureGood Advisor can help you through this process, helping you secure the coverage that makes the most sense for you.
What is a Peril?
In insurance, the source of a particular loss or damage is considered a peril. In that regard, a peril can be any number of hazards or events that lead to a claim. Often, insurance contracts use the term peril to describe what risks are covered under a particular policy.
Common perils in home insurance policies can include, but are not limited to, the following:
- Fires
- Lightning
- Windstorms
- Hail
- Riots or civil commotion
It should be noted that not all perils are covered in a given policy. For instance, while an earthquake is considered a peril, it may be excluded from a residential insurance policy. Homeowners would need dedicated earthquake insurance in this instance. This is important when understanding your insurance and what is or isn’t covered.
That’s where named and open perils come into play.
Named and Open Peril Policies: Which One is Right for You?
There are effectively two types of homeowner policies to be aware of to ensure you are appropriately covered:
- Named peril insurance policies—Coverage kicks in only following losses from perils or damages named explicitly in the policy itself. This often includes fire, theft, falling objects, and vandalism. Essentially, if the policy doesn’t specify whether or not a given peril is covered, it likely isn’t. Under these policies, the burden of proving that a named peril caused a loss lies on the insured.
- Open peril insurance policies—These policies (sometimes called all-risk or all-peril policies) provide coverage for all perils except those expressly excluded in the policy itself. While often more expensive than named peril policies, open peril policies are more comprehensive and usually have higher limits. In addition, under these policies, the burden is on the insurance company to prove whether a peril is excluded. Exclusions may vary by policy but generally apply to perils that require standalone insurance or are altogether uninsurable.
The type of policy that’s right for you will depend on your specific situation. For instance, those that live in natural disaster-prone regions will need a different kind of policy than those in lower-risk areas. When determining what coverage to elect, it’s a good practice to inventory your property and assess the most common risks to your home. An InsureGood Advisor can help you through this process, helping you secure the coverage that makes the most sense for you.
The Last Word
Contact an InsureGood Advisor today to examine your homeowner’s insurance coverage and ensure that you and your family are protected given the geographical region you live in.
