Home Insurance Basics: What Is A “Covered Peril”?

If you’ve been shopping for homeowners insurance for your Bailey, CO home, you may have come across the term “covered peril” and wondered exactly what it means regarding your policy coverage. The short answer is that a peril is any risk that can cause damage to your home or belongings, such as theft or smoke/fire damage. A covered peril means your insurance policy will pay specific reimbursements based on the limits in your policy if the peril is covered. Every homeowner’s insurance policy has lists of covered perils, but not all perils are covered by all policies. For information about specific perils, contact your Centennial State Insurance Agency agent. Here are some of the most common perils and whether most homeowner’s insurance policies cover them. 

Open Perils 

Your homeowner’s policy coverage may be based on open perils. This provides protection from all risks unless your carrier specifically lists and exempts them.  

Named Perils 

Most homeowner’s insurance policies name specific covered perils.  Because they don’t provide as much protection as an open peril plan, policies with named perils are typically lower in cost. These tend to appeal to homeowners who only require insurance against theft, fire, vandalism, hail, and other common risks. 

Common Perils 

The most common perils homeowners face include: 

Fire – Your home, belongings, and other structures such as sheds and garages are usually covered against loss due to fire or smoke damage.  

Hail – Most insurance companies provide insurance coverage for hail damage. 

Theft – Most insurance policies cover theft up to the limit of the policy. 

Windstorm – Tornadoes and hurricanes are generally covered by most property insurance policies., but it may require a higher deductible, and will not cover flooding.  

Flood – Flood insurance is generally not a covered peril in most homeowner’s insurance policies, and requires an additional rider for coverage. 

Earthquake – If you live in an earthquake-prone area, check your policy, because earthquakes are not usually covered by homeowners insurance without an additional earthquake policy.  

Remember that open peril homeowner’s policies don’t cover every loss, and named peril coverage may not be as limited as it sounds. If you have questions about what type of homeowners insurance will cover your Bailey, CO home best, give Centennial State Insurance Agency a call today.