Homeowners Insurance Perils: What Are They and What Do They Cover?
If you’re shopping for homeowners insurance, no matter what state you’re in, you may have heard the term “peril.”
At Insurance Geek, we know homeowners insurance shopping can be a daunting process, with a good bit of terminology and processes you’re not familiar with.
That’s why we’ve got you with our guide on the perils insurance policy.
Let’s break down what peril is, how it could affect your policy, and how to get the best homeowners insurance coverage possible.
What is a Peril Insurance Policy?
Perils insurance policy is one of the main parts of your home insurance policy.
A peril is defined as any event or hazard that can cause a loss or damage to your home and personal property. If the loss occurs as a result of any of the perils included in your perils coverage, you’ll be able to file a claim and receive money for the repair or rebuild of your property.
The perils section in your property insurance forms will help you understand what types of perils are covered. For instance, fire is oftentimes included in insurance policies, but many homeowners don’t have a portion of their policy that protects from water damage or offers earthquake coverage.
It’s important to make sure that perils specifically present in your area are covered under the perils policy. Your insurer can help you assess your peril coverage and add the ones that you may not have but can be causes for loss or damage to your property.
Perils and Risks
You may also see perils called “risks.” For this reason, one of the related terms is “risks coverage.” A “risk” may also involve an injury to someone else that occurs on your property, for which you may be found liable.
Common Perils Coverage Claims
Perils found on homeowners insurance policies may include:
- Fire damage
- Falling objects
- Damage from backed-up pipes or sewers (although this is often not a part of perils coverage, so you have to get a named perils policy)
- Earthquakes (again, not always covered in a standard homeowners insurance policy)
- Weight of ice, snow, or sleet
- Hail damage
- Explosion riot
- Airplane crashes or other flying object crashes
And many more.
If you don’t see one of the above listed on your home insurance policy but feel you need it, you can add different types of protection to your policy based on your needs via endorsement or rider. Chat with your local Insurance Geek, and we’ll tell you how to do so, thus enabling complete risk management for your property.
Contents Vs. Building in Homeowners Insurance
When you review your policy – or if you’re currently working toward obtaining a policy – be aware that you’ll see “building” and “contents” coverages on your policy.
Understand the Terms
The building portion of the policy covers the structure of your home, while contents refer to your belongings and everything else inside. These different parts of the property insurance have different protections, so make sure you read your policy or are able to understand the differences between the two.
Named Peril Vs. All (Open) Perils Insurance Policy
When deciding on the type of your insurance policy, with regard to perils, there are two possibilities: an open perils policy (also known as “All risks coverage,” or “ALL PERIL policy) and named perils insurance (also called “named perils coverage).
Named Perils Coverage
NAMED PERILS coverage refers to a specific loss you may incur as outlined in your policy. If you don’t see any type of loss in your policy, it may not be covered in the event of the loss.
Think about it in this way: named perils are specifically listed out in your insurance policy. If you don’t see a risk, it means that it is not a named peril and that your home isn’t protected against its damage. You should always double-check your named perils policy for the main causes of damage or loss in your area, and make sure that none are missing from the specifically listed ones.
Open Perils Insurance Policy
ALL PERIL policies are popular because they cover anything that could potentially happen UNLESS the peril is specifically excluded from it. You’ll find that an All-risks policy is often more expensive because of the level of protection it offers and the causes it covers. You may also see higher policy limits on an all peril policy.
One type of insurance coverage is not necessarily better than the other. While open perils policies are broader and do not include only specifically excluded causes, a named policy can be a good choice if you are particularly interested in a certain loss (e.g., fire or theft).
How Do I Know What My Insurance Covers?
Check out the declarations page of your policy to get the specifics. This is sometimes known as “causes of loss forms.”
Generally, most policies will contain the following types of insurance and coverage:
- Dwelling coverage (Coverage A) – protects the physical structure of your home against any damage and loss caused by a peril included in your insurance (e.g., fire or extreme weather conditions),
- Separate structures (Coverage B) – encompasses structures of your property that are separated from your dwelling structure – sheds, garages, fences, etc.,
- Personal property (Coverage C) – your belongings that are found on your property (appliances, clothing, collectibles),
- Loss of Use (Coverage D) – insurance for extra expenses, if you have to leave your property for a certain period due to damage caused by named perils,
- Personal liability protection (Coverage E) – used if a lawsuit has been filed against you to cover the costs,
- Medical payments (Coverage F) – accounts for medical bills in the event that someone’s injured on your insured property.
You are now familiar with what perils are and how important it is to have them in your policy.
Get a Quote Today
No matter which type of property insurance you are looking for, and whether you want to get an ALL peril or NAMED perils insurance, we’ve got you covered.
Insurance Geek helps you generate real-time quotes for insurance that will protect you against any causes that possess a threat for loss or damage in your home.
We value your user experience, so we don’t ask for unnecessary information! Just tell us some basic things about you – such as your address – and we’ll show you the best up-to-date offers for property insurance.
Which Insurance Company to Trust?
With so many insurance companies, it may seem daunting to choose the right one. Our carriers – Nationwide and Safeco – are reputable industry experts. We will present their offers because they are the most quality and affordable out there, but it’s up to you to decide whether you like them or not!