All homeowners’ policies will cover your home and personal property should it be damaged but the type of damage you are covered for is defined in two general types of insuring agreements.
One type (Named Peril) will tell you what specific types of damage you are covered for. The policies will actually name them; fire, lightning, wind, hail, theft, vehicle damage, vandalism, etc. For damage to be covered, you have to prove to the insurance company that the damage you sustained was caused by one of these named perils.
The second type of insuring agreement (often referred to as “ all-risk”) covers you for anydirect damage unless the policy specifically excludes or limits it. Under this form of insurance, any damage is covered unless the insurance company can prove a specific exclusion or limitation applies.
The burden of proof shifts from you proving you are covered under a “Named Peril” policy to the insurance company proving you are not covered under an “All-Risk” type policy. A small difference which means a lot should you have a claim.
The term “ all-risk” isn’t used too much anymore; this type of policy is often referred to as “Special Form ” or “Open Peril” policies. Whatever you want to call them, this is the type of insuring agreement you should look for. Most of us are not prepared to prove anything to an insurance company. It’s also much easier to understand what you are not covered for simply by reading the exclusions and limitations.
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All homeowners’ policies will cover your home and personal property should it be damaged but the type of damage you are covered for is defined in two general types of insuring agreements.
One type (Named Peril) will tell you what specific types of damage you are covered for. The policies will actually name them; fire, lightning, wind, hail, theft, vehicle damage, vandalism, etc. For damage to be covered, you have to prove to the insurance company that the damage you sustained was caused by one of these named perils.
The second type of insuring agreement (often referred to as “ all-risk”) covers you for any direct damage unless the policy specifically excludes or limits it. Under this form of insurance, any damage is covered unless the insurance company can prove a specific exclusion or limitation applies.
The burden of proof shifts from you proving you are covered under a “Named Peril” policy to the insurance company proving you are not covered under an “All-Risk” type policy. A small difference which means a lot should you have a claim.
The term “ all-risk” isn’t used too much anymore; this type of policy is often referred to as “Special Form ” or “Open Peril” policies. Whatever you want to call them, this is the type of insuring agreement you should look for. Most of us are not prepared to prove anything to an insurance company. It’s also much easier to understand what you are not covered for simply by reading the exclusions and limitations.