Have you heard the word “peril” in insurance and wondered what it means? A peril is a risk that may cause damage to your home or belongings, such as a fire or theft. Every homeowners policy has a list of perils that are covered, but keep in mind some perils might not be covered. Here is a breakdown of some of the most common perils and whether or not they’re covered in most homeowners insurance policies.
Your coverage may be based on open perils. Open peril coverage provides protection from all risks except any listed. Unless your carrier says otherwise, if a sea monster causes water damage to your living room, you’ll be covered!
Most policies list named perils. This list states what is covered by your policy. Because these policies provide less protection than an open peril policy, the cost of a policy with named perils is typically lower. Homeowners may opt for a named peril policy if they live in an area that doesn’t have earthquakes or hurricanes for example, and only require coverage for fire, theft, hail, and vandalism.
Hail – Most insurance companies will provide coverage for hail damage. It is almost always included in named perils.
Fire – A home, belongings, and structures (such as garages or sheds) are usually covered for fire damage (including smoke damage). Similar to hail, most insurance policies will provide coverage for a fire loss.
Flood – Flood insurance is not typically covered under a homeowners insurance policy and requires you to purchase additional coverage. This means it’s more than likely excluded from open peril coverage.
Windstorm – Commonly referred to as “windstorm” in policies, tornadoes and hurricanes are covered by most property insurance policies. HOWEVER, flooding from these events is not covered. That’s why it’s so important to have a flood policy. Speak with your agent about the amount of coverage provided for a hurricane. Depending on where you live, you may need a higher deductible to cover hurricane damage.
Earthquake – Earthquakes are often not covered by homeowners insurance. Review your policy to see if you are covered, if you live in an earthquake-prone area.
While you’re preparing for storm season, take some time to learn what perils are covered and not covered under your policy. Don’t forget, open peril policies won’t cover ALL losses, and named peril policies are not as limiting as they may sound. A Lighthouse agent can help tailor your policy to provide the best coverage for your home and needs.
Want to learn more about perils? Check out the difference between a peril and a hazard!