What Is The Difference Between Open And Named Perils With Homeowner's Insurance?

When it comes to homeowner's insurance, your coverage will be based on a lot of factors, including whether it has open peril coverage or named peril coverage. In any case, it is important to understand the differences between open perils and named perils, and here are a few things to understand about the differences.

The definition of a peril

To understand the differences between open and named perils, you must understand what a peril is. In insurance, a peril is something that your homeowner's insurance policy covers. In other words, it is some type of damage that you can file a claim for with your homeowner's insurance. Whether or not your policy covers a certain thing will depend on whether your policy has named perils or open perils, and it will also depend on the type of peril that damages your home.

What open peril policies cover

Having a policy that is an open peril policy means that you have a policy that covers everything. There is nothing listing on the policy that tells you what is and is not covered. The policy will cover anything and everything. Because this type of policy covers everything, you will likely pay a little bit more for the coverage than you would if you had a named peril policy. With an open peril policy, you can feel fully protected, knowing that your policy will cover just about anything. It is important to know, though, that homeowner's policies do not cover damage caused by floods. To have flood coverage, you would need to purchase a separate policy from a flood insurance company.

What named peril policies cover

A policy that is a named peril policy only offers protection for the things that the policy names. In most case, a named peril policy will usually cover around 15 different types of things, and each will be named. If something happens that is not listed on your policy, it would not be covered with a named peril policy. A named peril policy still offers a lot of protection, as it provides coverage for most common types of perils, but it might not offer as much coverage as a policy that offers open peril coverage.

If you are not sure what type of policy you have, or if you want to change your policy, you can learn more by contacting a homeowner's insurance agency like Bishop Insurance Agency. 

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