Learn more about homeowners insurance covered perils and how to find out what events are covered in your policy.
Definition and Examples of a Covered Peril
In homeowners insurance, a peril is an event that can cause loss or damage to your home.
Alternate name: Hazard insurance
A covered peril is included in your policy. If your home suffers loss or damage from that type of peril, your insurance company will reimburse you a specified amount to cover the damage. If a peril is excluded, you would not have coverage for the damage it could cause. For example, if a tornado were to touch down in your area and damage your home, your homeowner’s insurance would cover the repair costs if tornadoes were a covered peril in your policy. However, if the policy didn’t cover this peril (usually called a “windstorm” in policies), it would not pay for the repairs.
How Do Covered Perils Work?
A homeowners insurance policy assigns coverages to your home, property, garage, and other structures for different perilous events. If your home is damaged by a peril covered in your policy, you can submit a claim to your insurance company. Then, it pays for the damage or reimburses you for the repair costs. To have your claim approved, an insurance adjuster may come to your home to assess the damage. Their job is to ensure that it was caused by an event that your policy considers perilous. They’ll also determine what type of settlement the insurance company will pay. Perils may also refer to the source of an injury for which you may be liable, such as injuries sustained by a visitor on your property. Covered perils in homeowners insurance can include damage from:
WaterFireTheftEarthquakeVandalism
Not all perils are protected by a standard homeowner’s insurance policy. For instance, flood insurance is not part of homeowners insurance and must be purchased separately. Perils that are excluded may be called “uninsured perils.” They may also be called “uninsured risks” or “exclusions.” Your policy documents will list which perils are covered and which are not. Some hazards or risks may be added by endorsement or rider for an extra cost.
Named Peril vs. Open Perils (All-Risk) Insurance Policy
Insured perils will always be outlined in the policy; the exception is an open peril or all-risk policy. A named perils policy only covers losses due to specific hazards and events, which must be stated explicitly in the policy wording. An open perils policy only lists the hazards that are not insured. An open perils policy is a more comprehensive coverage; therefore, it’s more expensive.
Types of Covered Perils
Your policy declaration page (or “dec”) will show you what type of policy you have, based on the form listed. The insured perils will not be specifically listed on the “dec” page. Instead, they will appear in the policy contract wording. Any exclusions will also appear in the language. Therefore, it’s crucial that you read them; especially in the case of an open perils policy. Covered perils can include a variety of hazards and damages.
Fire
Fire involves flames produced by a spark or glow or a smaller flame that causes a hostile fire. Hostile fire is a fire that burns where it is not meant to burn, such as a bed or curtains. Direct damage due to a hostile fire is covered under the fire peril.
Lightning
Damage or fires caused by lightning are both covered under the lightning peril. Damage to the electrical system or appliances in a home due to a lightning strike is also covered. However, any electrical damage that comes from the company providing the power is not.
Explosion
Coverage for an explosion can vary; it depends on the policy. For example, a policy might only cover damages from explosions that start within the insured structure. However, a policy might include an explosion that originated outside your home and caused damage.
Windstorm
Windstorm damage is caused by high winds. Windstorms include cyclones, tornadoes, and hurricanes, which damage the outside of the property. Depending on the cause and extent of damage, this coverage might insure the inside. The interior usually is included if the wind causes an opening to the inside, such as blowing out a window. Some policies have additional deductibles for damage caused by windstorms.
Hail
Policies may include damage caused by hail. In most cases, the inside of the structure is only covered if the hail itself breaches the structure and causes internal damage. If the hail came in because of a window you opened, the damage would not be covered, because the hail didn’t breach the outside walls on its own.
Riot or Civil Commotion
A riot is often defined as three or more people causing property damage. A civil commotion is defined as damage caused by a larger number of people.
Aircraft
Aircraft damage is caused by any flying machines, such as balloons, helicopters, airplanes, or spacecraft. You should check with your policy provider about damage from drones.
Snow
Some policies cover snow as a peril. It often includes damage to your home from the weight of ice, snow, and sleet.
Water and Sewer
In some states, insurance companies are required by law to offer coverage for damage caused to your home by water and sewer backups. In some states, you may need to purchase separate sewer insurance to cover damages.
