how a named perils insurance policy works
if a homeowner doesn t live in an earthquake and flooding prone area they may elect to get a named perils insurance policy and only declare coverage against fire theft and hail while leaving the earthquake and flooding coverage off the policy keep in mind that all risks policy does not necessarily guarantee your property will be covered against all forms of perils it s thus a good idea for homeowners to check their broad coverage policies to make sure they do cover all the perils that they are concerned about if the broad policy isn t sufficient homeowners should buy a named peril policy to fill that hole in their coverage named perils insurance vs all risks insuranceinsurance providers generally offer two types of property coverage for homeowners and businesses named perils and all risks all risks is a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit 1for example if an all risk homeowner s policy does not expressly exclude hurricane damage then the house will be covered in the event of a hurricane a named perils policy contains conditions that cover what the insurer thinks are the most likely perils a named perils insurance contract only covers the perils specifically stipulated in the policy as an example an insurance contract might specify that losses caused by fire or vandalism will be covered therefore an insured who experiences a loss or damage caused by a flood cannot file a claim to his or her insurance provider as a flood is not named as a peril under the insurance coverage under a named perils policy the burden of proof is on the insured by contrast an all risks policy covers the insured from all perils except those specifically excluded from the list contrary to a named perils contract an all risks policy does not name the risks covered but instead names the risks not covered in so doing any peril not named in the policy is automatically covered special considerationsthe most common types of perils excluded from all risks include earthquake war government seizure or destruction wear and tear infestation pollution nuclear hazard market loss etc an individual or business who requires coverage for any excluded event under all risks may have the option to pay an additional premium known as a rider or floater to have the peril included in the contract 1