What Are Named Perils?
<lingo>Named perils is a term referring to the exact events covered under the insurance policy. Should an event occur that isn't named, the insured party will receive no financial compensation for their losses. A named peril policy tends to be less expensive than comprehensive policies because it doesn't provide as much protection to the homeowner. Or some homeowners will purchase additional coverage in the form of a named perils policy to supplement their broad coverage policy. If the owner has an all-risks policy, they're covered against any event that isn't specifically omitted in the policy. Named perils can add that protection if an event is omitted.</lingo>
Named Perils Explained
You can use 'named perils' in one of two ways: you either buy it as your sole policy or use it as an additional layer of security to your existing coverage. Comprehensive coverage may sound like a sure-fire bet to keep your property safe, but these policies may have a few exclusions that aren't immediately apparent. Reading the fine print will give you a better idea of where the gaps lie in your insurance coverage. Most homeowners will weigh their odds when it comes to named perils. If you don't live in an area where tornadoes typically occur, then you can probably leave this event off of your policy.
<twitter>Named perils is a term referring to the exact events covered under the insurance policy. Should an event occur that isn't named, the insured party will receive no financial compensation for their losses.</twitter>
Floods and earthquakes are usually the two most important events for homeowners to know — because they're usually not covered under a comprehensive insurance policy. However, there are other events that homeowners may not have considered, such as property destruction due to the state or federal government or severe pollution. Everything from nuclear hazards to infestations can pose a threat to the home, and if the policy doesn't mention these occurrences, homeowners will find themselves either paying for the losses or living with the destruction. If there's an event that you want to see added to your policy, you can talk to your carrier to add a clause to your policy for an additional cost.
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