Insurance perils are specific events covered in your policy. It's important to understand the limits of your homeowners insurance policy, especially any excluded perils. Here's a quick guide to the basics:
A named perils plan covers 16 types of peril. However, it's not a universal list. For example, wind damage is not included in certain coastal zones and must be separately endorsed.
The words risk and danger are similar to each other and are sometimes used interchangeably. However, insurance counts them as separate things. A risk is the possibility of a loss, while a peril or hazard is the actual cause of a loss.
Some common examples of insurance risks include:
The HO-2, HO-3 and HO-5 types of homeowners policies determine if your policies are defined against a set of specific risks based on location or home features.
A homeowner is affected by the perils insured in their policy, but so is the insurance company. Increased risk and covered perils both pose a higher cost to your insurer, which can increase the cost of your coverage.
Your mortgage lender could also be indirectly affected by home insurance risk because damage could negatively affect your home's value. To determine the specifics of your homeowners insurance, consult your provider for details.
I grew up in a small town in Wyoming and married my high school sweetheart. I purchased my first home when I was 18 and immediately found a passion for real estate. One year later, I passed the Wyoming Real Estate Exam, and successfully purchased my second property! I love to help people navigate the real estate process and connect with my customers to help them achieve their real estate goals! With more than 25 years of experience in the industry – including residential, commercial, timeshare sales, and property management: I thrive on new opportunities to assist Buyers and Sellers. When not listing a property or negotiating an offer, you may find me on the beach enjoying some "Salt Life", volunteering at my child's school, and helping out in the community. Finally, I am proud to sit on the board of directors of a dedicated 501c3 foundation & help veterans, active service members, & first responders find relief from PTSD through scuba diving.
