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Article Number 8
GetCoveredUSA.com
August 21 , 2007

Whats the difference between an All Risk and a Named Peril insurance policy?

Homeowners have many options to choose from when obtaining an insurance policy. The most basic coverage of all would be a Fire policy and the most inclusive is the All Risk. The entire spectrum in between is filled in by various insurance carriers whom over the years have added and subtracted various possible events that could result in a loss. In recent years mold and water have shot up to the top of the list of concerns for insurers in the United States. Many carriers specifically exclude or limit mold/water losses on their policies. Some carriers have backed out of writing home policies in entire states due to repeat catastrophic exposure to coastal events.

What is a Named Perils Insurance Policy?

A Named Perils insurance policy covers losses or "perils" that occur that are specifically listed on the insurance policy. Commonly covered perils could be Wind, Hail, Fire or Lightning. If you are buying a Named Perils insurance policy on your property, you need to make certain that events that could potentially occur in that location are covered. Also make certain that the maintenance condition of the home is suitable for the policy so that a claim wont be denied if conditions of the home are determined to be non-compliant. An example of this could be a home that is in a rural area of brush or trees and the vegetation isnt cleared to a minimum safe distance required by the company insuring the property. If the insurance carrier has a requirement that there be a 500 foot radius free of brush around the home and it burns because the requirement was not followed, a claim might be denied.

What is an All Risk Insurance Policy?

An All Risk insurance policy covers losses or "perils" that occur unless specifically excluded on the insurance policy. The big difference on this policy is that this policy will insure any loss unless it the insurance company says it isnt covered. There of course arent too many things that could occur that havent already happened to someone else before so many perils that the insurance carrier does not want to insure against will be excluded by a classification. Examples of this are Flood and Earthquake. Standard insurance policies normally exclude both of these events, however Flood insurance can be purchased through many carriers for the National Flood Insurance Program and Earthquake insurance is also offered at the state level by states such as California that are commonly earthquake prone. Both Earthquake and Flood insurance can be purchased through your regular home and auto insurance agent.

GetCoveredUSA.com TIP: All Risk insurance policies are always better than a Named Peril type policy. It is still very important to read and understand what is covered and what is not regardless of which policy you end up choosing.

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