Understanding Perils in Homeowners Insurance 

Homeowners insurance can help safeguard your financial stability against unexpected events. These unforeseen incidents, known as perils, can cause significant damage to your property, leading to costly repairs.

What is a Peril?

In the context of homeowners insurance, a peril is any event that causes damage to your home or personal belongings. Homeowners insurance policies list covered perils, so you know exactly what events are included in your coverage.

Named Peril Coverage

Named peril coverage is insurance that may cover your home and belongings only from specific risks or events explicitly listed in your policy. If a loss occurs due to a peril that isn’t listed, it won’t be covered. Common named perils include fire or lightning, windstorms, hail, theft, vandalism and explosions.

Open Peril Coverage

Open peril coverage, also called “all risk” coverage, may help cover your property from any damage or loss unless a specific event or risk is excluded from the policy. This shifts responsibility to the insurance company, meaning they must prove that the loss isn’t covered rather than you proving it is.

For example, if your policy excludes earthquakes but doesn’t mention floods, flood damage may be covered under open peril coverage.

How Do Different Policy Types Cover Perils?

Homeowners insurance policies vary in how they cover perils, depending on the type of coverage they offer. The kind of policy you have will determine if your dwelling and personal property are covered on a named or open peril basis. Here’s a breakdown of how perils are generally covered:

• HO-2 includes named perils for both dwelling and personal property coverage.

• HO-3 covers the dwelling on an open perils basis (all perils except those explicitly excluded) and personal property on a named perils basis.

• HO-5 covers both the dwelling and personal property on an open perils basis.

Contact Us

Home Loan Insurance in Grand Junction, Colorado, is a trusted provider offering customized policies to meet your specific needs. With a focus on customer satisfaction and robust coverage options, we can ensure you’re financially protected against a wide range of perils. Contact us today or request a free quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.