What is a peril in insurance?

In insurance, the definition of peril is any event, situation, or incident that causes property damage or loss. Fire, theft, wind, and vandalism are common perils that homeowners insurance can cover. It’s important to understand which perils your policy covers so you know when you can count on your insurance to pick up the repair bill if necessary.

What is a covered peril?

A covered peril is an event that causes or leads to damage to your property which is either not excluded or not covered in your insurance policy. When a covered peril occurs, a homeowner is typically protected against the financial losses that may result, subject to your deductible.

The key is that the insured (i.e., the person covered by the policy) takes the proper steps. For instance, if you have a claim for a peril, your insurance company often requires you to  protect your property from experiencing more damage and to file a first notice of loss as quickly as possible. This is true whether or not the peril is covered.

Are all perils covered?

No home insurance policy covers every single type of loss event. The type of policy you have determines how many perils are covered.

Policies offer two types of coverage for perils: named perils or open perils (also called all risk).

Named perils

Policies that offer basic and broad coverage only cover perils that are named in the policy (this is also called named perils coverage).

Usually, named perils policies cover loss or damage from these 16 events:

1. Fire or lightning

2. Windstorm or hail

3. Explosion

4. Riot or civil commotion

5. Aircraft

6. Vehicles

7. Smoke

8. Vandalism

9. Theft

10. Volcanic eruption

11. Falling object

12. Weight of ice, snow, or sleet

13. Accidental water overflow or steam

14. Sudden and accidental tearing apart, cracking, burning, or bulging of certain household systems

15. Freezing

16. Sudden and accidental damage from artificially generated electrical current

With a named perils policy, you are only protected if the cause of a loss is one of these listed perils, and that leaves a lot of gaps.

Open perils or all risk

“Open perils” or “all risk” means all perils are covered except for those the policy either excludes or doesn’t cover – essentially, the opposite of how named perils work. In an open-perils policy, more losses are covered, and you know exactly which aren’t.

Our policies offer open perils coverage for your home and other structures so that you’re protected for more types of loss.

Which perils are excluded from an open perils policy?

Standard exclusions in an open perils policy may vary from state to state, so look at your policy or ask one of our representatives about your exclusions.

In some cases, an excluded peril can be covered by your policy for an additional fee.

That said, these perils are usually listed as exclusions in an open perils policy.

• Land movement. This includes earthquakes, sinkholes, landslides and other scenarios where the earth moves.

• Flood and water damage. This includes sewer backup, overflow from sump pumps, and water below the ground that affects your foundation. This does not include storm surges – only flood insurance covers that.

• Power failure. This is when the failure takes place off premises.

• Neglect. Along with reasonable upkeep, you must do all you can within your means to prevent loss from occurring and from a loss getting worse if your property is damaged.

• War. What is it good for? Absolutely nothing!

• Nuclear hazard. Let’s hope this never happens.

• Intentional loss. If you or another insured cause a loss on purpose, it won’t be covered by your policy.

• Frozen pipes in a vacant property. A property is considered vacant or unoccupied after 30 days. You should note, too, that you have a responsibility to drain water from your pipes and to make sure the water in your home is turned off.

• Ice and water pressure. This is when ice freezes or thaws and causes damage to a fence, patio, pavement, swimming pool, foundation, or retaining wall. This also includes damage done by the weight of accumulated ice or water. 

• Construction theft. Theft is not covered until a dwelling is finished and occupied.

• Vandalism and mischief in a vacant property. This is uncovered if the premises have been vacant or unoccupied for more than 30 days.

• Wear and tear. This is normal and expected, so it is not covered by insurance.

• Mechanical deficiency or breakdown. Appliances and other mechanical equipment are not covered by your homeowners insurance policy.

• Smog, rust, corrosion, and rot. These things happen slowly, so you should be able to take preventive action before a loss happens.

• Industrial / agricultural smoke. This refers to any damage that may result from smoke or smog from nearby industrial or agricultural operations that affect your property.

• Settling, shrinking, bulging, or expansion. This includes the results of earth movement, like cracked pavement, foundations, walls, etc.

• Birds, vermin, rodents, or insects. Typically, home insurance doesn't cover termites and other pests, so keep a critter-free property.

• Animals you own. This includes any property loss caused by an animal that you own. Animal liability is a different beast. (FYI, our Signature Coverage Collection can cover damage caused by your pets.)

Learn more about what home insurance covers.