Skip to main content

What is Peril Insurance?

By July 10, 2021September 30th, 2021Home

When it comes to insurance, peril refers to a specific hazard or event that could cause damage or injury to a person or property. Perils are a stated list of events that your insurance company will or will not cover if needed.

 

Named Perils Insurance

In some instances, your insurance policy will only cover the specific perils that are explicitly named in your policy. These perils can range from wind and hail storms to fire damage, smoke damage, or vandalism. This is referred to as Named Perils Insurance. The goal of this type of insurance policy is to protect yourself, your home, or your business against the sudden or accidental, therefore things that can be prevented or happen over time will most likely not be covered. Your insurance policy will usually name 16 perils you are financially protected against, but this can very from state to state. It’s crucial to be cautious of the specific wording used by your insurance company in order to ensure you’re aware of exactly what entities are being covered. For instance, if your policy specifies fire damage, that likely won’t include smoke damage unless otherwise stated.

 

All Perils Insurance

All Perils Insurance will cover all possible perils, with the exception of a few. Instead of listing things that are covered, everything is assumed to be included in your policy unless otherwise stated. For instance, negligence or intentional loss are rarely ever covered by your insurance policy, along with damage caused by war or mold. If it is not directly listed as an exclusion, then your insurance policy covers it. Due to the broader coverage available, All Perils Insurance is often more expensive than a Named Perils policy.

 

Hazard vs. Peril vs. Risk

While the terms hazard, peril, and risk are often used interchangeably, there are a few key differences to note when in reference to insurance. Peril refers to the physical items which can cause harm to yourself or your property. Hazard, on the other hand, refers to something that could lead to a possible peril. Finally, risk is the probability that a hazard will result in peril, or that a peril will take place. For instance, in a scenario where an air freshener is plugged in near a curtain, the hazard would be the air freshener, while the peril would be a house fire ensuing.

Protecting yourself and your valuables are key reasons to have a secure insurance plan in place. With White Cloud Insurance, get a policy that’s more than the price.