In insurance terminology, a peril is an occurrence or event that causes damage to your home or belongings. Damages may occur for several reasons; if the damage comes under the category of a covered peril, the insurance company agrees to reimburse you if you file a claim. The homeowners insurance companies also mention the peril that is not covered by your policy. The company will not refund if the damage occurs due to these excluded perils. Suppose you wish to modify or add coverage to your policy to cover specific causes or events of loss that are excluded under the basic homeowner’s policy. In that case, your homeowner’s insurance company shall allow you to do so.
What are the types of insurance and perils?
There are three main categories of homeowners insurance – the HO-2, HO-3, and HO-5. The base-level coverage is different for each policy form.
- HO-2 – This policy provides the most limited protection; your home and personal property are protected with named perils coverage.
- HO-3 – It is the most common policy. Although it covers all risks comprehensively for your home structure, it provides only restricted named perils coverage for your personal assets.
- HO-5 – It is the most robust policy providing perils coverage to both your home and personal belongings considering all the risks.
What are all risks, open perils, and named perils policies?
Generally, the same perils are covered by most homeowners insurance policies. When you incur losses from fire, water from burst pipes, or theft, they are covered whether you have a named peril HO-2 or an open peril HO-5. However, when deciding on coverage, the distinct differences between the two must be kept in mind.
Named perils
It means that the insurance policy protects from the 16 specifically named perils. If you file a claim, you have to prove that the damage was due to a peril mentioned in your policy. It may sometimes happen that the insurance company may prove otherwise; they may claim that there was a problem with your home or belongings and the damage was not caused due to the peril. If you don’t have substantial proof, the homeowner’s insurance company may back off, stating that it is not their responsibility. This insurance type might be a risky option for homeowners since the insurance company has the power to maneuver its way out with named perils.
Open perils
Except for approximately the ten perils or scenarios mentioned in the policy, open perils are an “all-risk.” It covers homeowners for everything. It is a better option as the burden of evidence is on the insurer to prove that coverage is excluded.
What perils does homeowners insurance cover?
The list of your named perils is mentioned in a section in your homeowner’s insurance policy. The power to exclude coverage against certain risks rests with the insurance company if they believe that your home is too risky for them to take on that kind of liability. For instance, the insurance company may exclude fire damage from coverage in areas prone to wildfires depending on your profile risk. To bridge this potential coverage gap, you need to get a special policy to cover those particular perils.
List of perils covered in homeowners insurance:
Fire and smoke
If your home, other structures like a shed or garage on your property, and personal belongings are damaged in a fire or smoke, the homeowner’s insurance policy shall cover you for this peril. If the residents have to relocate or live in another place while the home is being repaired or rebuilt, typical homeowners’ insurance shall reimburse to cover additional expenses. It is applicable for any covered peril.
Windstorm and hail
Even if the damage is caused by a natural disaster like a hurricane or tornado, a standard policy covers it under the category of windstorm and hail damage. Windstorms or hail can cause damage to your roof, windows, or foundation. Besides the wind damage, if water or snow enters the home after being damaged by wind, homeowner’s insurance provides coverage for that. Read your documents carefully to learn about any exclusion.
Lightning
Homeowners’ insurance also covers damage caused by lightning strikes. If a tree falls on your home due to a lightning strike, its removal and structural repairs are likely to be covered by homeowner’s insurance companies. Similarly, if it hits a power line, leading to a power surge, damaging electronics, the homeowner’s insurance covers that as well.
Explosion
When something explodes inside or around your home from an aerosol can or a propane grill, homeowner’s insurance usually covers the damage caused.
Vandalism and Malicious Mischief
If your home or possessions are damaged due to one of these acts, homeowners’ insurance covers this damage. Repairing or rebuilding your home and replacing your possessions would be part of the homeowner’s insurance company’s job.
Damage from a car, aircraft, or vehicle
This is not something that happens often, but when it does, the results can be pronounced. Homeowner’s policy shall cover you from any damage by paying for the repairs resulting from such an accident.
Theft
If a thief breaks into your home, homeowners’ insurance will likely cover up for the damage. The Personal Property Coverage criteria that are a part of most homeowner’s insurance policies protect the stolen items. However, there is a limit on the amount that most policies would pay out for specific types of personal belongings (jewelry, art, silverware, and guns). You have the option to purchase additional coverage for those items.
Falling object
If a falling object like a meteor or tree during a storm harms your home or its belongings, you will be typically covered for the losses by homeowners’ insurance.
Weight of ice or snow
Suppose your roof caves in due to the accumulation of ice or snow on your rooftop damaging your property. Homeowners’ insurance may cover you for a new roof or reimburse you for any damage to property inside your home.
Water damage from burst pipes
If accidental or sudden bursting of pipes or water heaters causes damage to your drywall or floods your basement, you will typically be covered by homeowners’ insurance. However, you need to mentally note that the damage to the pipe or heater must not be due to wear and tear or defect. Water damage due to floods would not be covered here; you would require a separate flood insurance policy to cover up for damage due to floods. Additional coverage (optional) can be obtained for water damage from sewers, drains, or overflow of water submersible pumps.
Conclusion
Your home is your prized possession; a basic homeowner’s insurance policy is essential for protecting your home and belongings from natural or man-made disasters, minimizing financial losses.
It covers you from damage resulting due to several incidents. Still, in case of scenarios like an earthquake, lack of maintenance, ordinance exclusion, homeowners’ insurance companies won’t reimburse for the losses. Also, remember that there is a limit to the insurance cover and it is subject to deductibles. Contact TX Insurance Quote right now if you want to cover your home with homeowners’ insurance and have any doubts or queries! We are a stellar insurance company with over 35 years of experience. Get your homeowner’s insurance quote today!
