The term “perils” is typically used to describe a specific risk, or cause of loss covered by an insurance policy.
Some policies have a list of “named-perils” such as fire, windstorm, theft, vandalism, and so on. If you have the type of policy that names specific perils, then your insurance company is agreeing to cover you only in the event that those events occur. If something happens that isn’t on the list, you are not covered by the insurance policy.
There are policies, known as “all-risk”, which cover any perils EXCEPT those specifically listed in the policy as exclusions.
Knowing which perils are covered by your insurance policy, and which are not is very important, especially when comparing insurance policy quotes.
Instead of only paying attention to price, keep an eye on the coverage the policies offer – which perils are covered and which aren’t can make a huge difference.
If you are shopping for home insurance, here is a list of perils you can expect will be included in the most common home insurance policies:
Source: Insurance Information Institute
There are exceptions, even in “all-risk” policies.
The most common exceptions are damage caused by flooding and earthquakes.
If you want to be protected against these disasters or perils, then you must buy two separate policies.
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