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A peril is commonly defined as an event or circumstance that leads to property damage. Windstorms, fires, power surges, and falling debris can all count as perils. Insurance policies will tell you which perils they cover and which they do not. Common covered perils include lightning strikes, hail damage, and vandalism. Read on to learn more about what you need to know when it comes to insurance and perils.
A covered peril means you can file a claim for property damage caused by that particular peril. Your insurance carrier will be able to help you financially (though the claim will take other factors into account, such as your insurance deductible and limits).
In a typical homeowners insurance policy, covered perils may include: fire, lightning, vandalism, theft, and hailstorms.
Flood insurance-specific perils can include flash floods, storm surges, high tide, and stormwater runoff.
An HO-1 is the standard insurance policy for homeowners coverage. It means that your insurer will provide coverage for the physical structure of your property from perils listed specifically on the policy.
On top of the 10 types of perils covered by an HO-1, the HO-2 covers an additional 6 types of perils. These are:
An HO-3 special form for homeowners insurance is an open peril policy that has more coverage than the HO-2. It will cover perils except for ones that are excluded from your policy. Common exclusions include earthquakes, flood, government acts, mold, neglect, and pet damages.
Here are the commonly mentioned 16 insurance perils:
An HO-5 is essentially the most comprehensive home insurance option. Like an HO-3, it provides open peril coverage, but you will not be protected against specifically excluded perils. An HO-3 would have named peril coverage for personal property damage, whereas an HO-5 would have open peril coverage.
Mobile homeowners can benefit from the HO-7. It provides coverage against multiple perils that may damage your mobile home.
If you own an older home, you may want HO-8 modified coverage. It usually covers historic buildings and occupied older homes that were built many decades ago. Usually, HO-8 coverage is rather limited.
People renting property can benefit from an HO-4, which protects a renter’s personal property and can also address their personal liability.
The HO-6 is a condo insurance form. It is similar to homeowners insurance, except it is for condominiums.
The DP-1 and DP-2 are named peril policies, whereas the DP-3 is an open peril landlord insurance policy.
Flood insurance covers damages caused specifically by flood-related perils.
Different policies may cover perils using different language. If your policy offers “open perils coverage”, you are covered against any perils except those that are specifically excluded. If your insurance has “named peril coverage”, your policy will only offer protection for the perils that are specifically named within the policy.
Dwelling coverage would offer payouts for repairing or rebuilding your home structure.
Your home should usually be insured at its replacement cost, which is the price it would take to rebuild your property as opposed to the market value buyers would pay for it.
This covers other structures you may have on your property, such as fences and sheds.
This covers personal belongings, such as furniture and clothing.
Replacement costs usually do not take into account depreciation, unlike actual cash value coverage.
Also known as additional living expenses, this covers reasonable housing and living expenses in case of a covered peril.
Is someone injured on your property? Liability insurance may cover related expenses.
If you need to make medical payments to others, this coverage can help out.
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