Have you tried to make a home insurance claim but your insurer turned you down? On asking, you were told the policy doesn’t cover the type of claim you made? Probably, that is true because every insurance policy covers specific aspects. Those are contained in what is called named perils insurance policy.
If you have been turned down before, it is because your policy doesn’t cover one or more of the claims you made. You don’t want that to happen again, do you? So, you must find out what named perils in home insurance mean and what they cover.
What is a Named Perils Policy?
A named perils insurance policy covers specific losses or damages in your home. What this means is that if your home is damaged because of those specific items, it would be covered with the insurance.
Worthy of mentioning is that the named perils insurance policy both the home and its content are covered with the policy. That is, your personal belongings and the structure of the home would be replaced or repaired if any of the events named on the policy happens.
What Type of Damaging Effects are Considered?
In determining what are named perils in home insurance, you have to be sure of the type of damage. You see, the events or hazards are already named, but you may be unsure of the format they would take.
Would the named perils insurance policy protect your home and your properties if the hazards happened directly?
Typically, the policy kicks in if the hazards or events named on the policy happen directly to your property or belongings. You can also activate the named perils coverage insurance policies if there are damages or physical loss to the properties covered in the policy.
What is Covered Under Named Perils Insurance?
We already agree that the named perils insurance policy is ideal for homeowners looking to be specific with the type of coverage they get.
But what do named perils cover in your home? What type of damages or physical losses would happen and the policy would kick in?
These are generally called the 16 named perils insurance. Aside from these 16 events or hazards, your home may not be fully covered if something else happens to it.
Here is a list of the 16 named perils on a homeowner’s policy:
- Windstorm and hailstones
- Fire and lightning
- Damages by vehicles
- Damages by aircrafts
- Falling objects
- Riots and civil commotion/unrest
- Freezing of household appliances and systems, including fire sprinklers, plumbing appliances, and air conditioning units.
- Accidental power surges
- Smoke
- Explosion
- Weight of snow, ice, and sleet.
- Vandalism and malicious mischief
- Volcanic eruptions
- Accidental discharge of steam or water in the home.
- Accidental damage due to short-circuiting in the home.
- Accidental burning, cracking, bulging, and tearing of home appliances.
Named Perils Insurance Policy and the HO-Policies
Your named perils insurance policy doesn’t cut across all the HO policies. Rather, it hinges on the HO-1, HO-2, HO-3, and HO-8 policies. Even at that, the policy differs for each of them.
For example, in the HO-1 insurance policy, the named perils insurance policy only covers 10 out of the 16 named perils.
The HO-3 policy is usually the standard because it covers the entire 16 named perils. However, it only applies to personal property. In that case, your business premises or property may not be eligible to use the HO-3 named perils insurance policy.
The HO-8 policy covers both the dwelling and personal properties. Just like the HO-1 policy, the HO-8 policy only covers 10 of the 16 named perils.
The HO-2 is your best bet because it covers the entire 16 named perils. However, you have to search deeper to get it because only a few homeowners’ insurance companies sell it.
Named Perils vs All-Risk Home Insurance Policy: What is the Difference
A named perils insurance policy is also called a special peril policy. It is often compared to the all-risks perils because of some reasons. The major reason for the comparison is that the two have different coverage options.
But what is the difference between a named perils insurance policy and all-risks coverage? The primary difference is that the former (named perils insurance policy) only covers the home against the named perils while the latter covers more than that.
As a homeowner looking to protect your home beyond the 16 named perils, it is worth it to get the all-risks policy.
One of the benefits of getting an all-risks coverage is that it covers the unnamed perils. Unlike the named perils insurance policy, it doesn’t expressly name the hazards or events covered on the policy.
Named Perils Insurance Policy vs Broad Named Perils
The three (3) common kinds of homeowner’s insurance are named perils insurance policy, all-risks policy, and broad named perils.
You already know the difference between named perils vs all-risk. But what is the difference between a named perils insurance policy and broad named perils?
Broad named perils are a type of home insurance policy that shares or divides the coverage options between the dwelling and its content. With it, both your home (dwelling) and its content (personal belongings) would be covered with the same policy.
Most times, the home insurance company would divide the payouts or claim amount between the dwelling and the content.
What isn’t Added to My Named Perils Policy Coverage?
The 16 named perils are the hazards and events that are covered with your named perils insurance policy. Anything beyond that is exclusive and isn’t typically covered by the policy.
However, you shouldn’t be limited to the named perils coverage. You can decide to juxtapose by comparing your options with named perils vs all perils. Find out the extent of both coverages and add more coverages if you aren’t satisfied with what the named perils insurance policy covers.
Conclusion: Is Named Perils Insurance Policy Right for You?
Does the named perils insurance policy seem like a better home insurance policy? Do you stand to benefit a lot from using it when compared to the other home insurance options? The right home insurance policy should cover as many properties and structures in the home. You also want to consider the premiums and coverage options before purchasing.
