Named Perils Coverage
Definition:
Insurance that only covers risks specifically listed in the policy.
Explanation:
Common named perils include fire, theft, wind, hail, and vandalism. Any cause of loss not listed is excluded.
Example:
If lightning damages your home, it’s covered under named perils coverage. But if damage is caused by rodents, it won’t be covered unless listed.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.