Perils

How does an insurance company define “perils” and why does it matter to you?

A “peril” is something that causes or can cause a loss and is what insurance companies insure your home against.  The “basic” named perils are fire, windstorm, smoke, lightening, explosions, hail, riot and civil commotion.  Some insurance policies specifically state they only insure against these “basic” perils.

There is a second level of insurance protection against “broad” perils which is all the “basic” named perils, plus falling objects, weight of snow, ice and sleet, water damage from leaking appliances, and collapse due to specified other causes.  Some insurance policies specifically state they only protect against these “broad” perils.

Finally, other policies called comprehensive, special, all risk, or open specifically state they provide against all perils or sources of damage except those that are specifically excluded in the policy.  Tornados in Florida, earthquakes, and floods are commonly excluded in homeowners policies and require a special policy to protect against these specific perils.

Peril and hazard are two terms that are often used together in the insurance industry.  A peril is something that causes or can cause a loss.  A hazard is something that makes the occurrence of a peril more or less likely.

Do you know what perils are covered in your policy? Basic? Broad? Comprehensive? It is probably a good idea to check and know for sure.  Please call me, Jim McKee at 615-377-0017.