This type of policy provides broader coverage than a named perils policy, but with a premium that is usually higher.

Named perils insurance policies offer a budget-friendly protection of a homeowner’s personal property and structures. These policies provide coverage from specific perils or risks listed on the policy. This makes it an ideal option for homeowners who want a lower premium than an all risk insurance policy but want limited protection from certain risks.

Named perils insurance policies are designed to cover losses from hazards such as theft, fire, smoke, lightning, theft of automobiles, windstorm, hail, certain explosions and unintentional overflow of water from a plumbing system. The number of covered perils may vary depending on the terms and conditions of the policy. There is no protection against any issue or event that isn’t specifically named in the policy.

Named perils insurance is an attractive option for homeowners who live in an area where hazardous events occur sporadically, or they know that they’re unlikely to suffer an all risks loss in the home. In addition, if a homeowner lives in a floodplain, they may be likely to find this type of policy cheaper than adding flood insurance to an all risks policy.

It’s important to read through a named perils insurance policy to ensure it provides complete coverage for the risks to which a homeowner is exposed. Keep in mind that a named perils insurance policy does not cover losses caused by negligence or malicious acts. Also, some policies may exclude certain perils that may affect the area in which the home is located.

Overall, named perils insurance policies provide a viable option for homeowners looking for specific coverage on certain risks without paying for an all risks policy. Carefully read through the policy before signing to make sure it covers the list of risks that could affect the homeowner’s property. Consulting a reliable and knowledgeable insurance agent or broker is a great way to get clarity and advice on a proper policy.