insurance
Named Perils Policy
Definition: An insurance policy that only covers losses from specific risks explicitly listed in the policy.
A named perils policy (also called "specified perils") only provides coverage for losses caused by risks specifically listed in the policy. If a peril isn't named, it's not covered.
Common Named Perils:
- Fire and lightning
- Windstorm and hail
- Explosion
- Smoke damage
- Theft
- Vandalism
- Damage from vehicles or aircraft
- Riot or civil commotion
How It Differs from Open Perils:
- Named perils: Only covers what's listed
- Open perils: Covers everything EXCEPT what's excluded
Advantages:
- Lower premiums than open peril policies
- Clear understanding of what's covered
- Good for budget-conscious buyers
Disadvantages:
- Less comprehensive coverage
- Burden of proof is on you to show the loss was from a named peril
- May leave gaps in protection
Common Uses:
Related Terms
Personal Property Coverage
Insurance that protects your belongings inside your home against covered perils.
Covered Perils
The specific risks or events that your insurance policy protects against.
Open Perils Policy
An insurance policy that covers all risks except those specifically excluded in the policy.
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