What is considered a ‘named peril’ in property insurance?

In property insurance, a ‘named peril’ policy specifically covers only those risks that are explicitly listed in the policy document. This means that if a particular peril is not mentioned as being covered, then it is not included under the protection offered by the policy. This approach allows policyholders to have clarity about what is covered and to assess any potential risks that may not be accounted for.

In contrast, other types of policies might provide coverage for all risks unless they are specifically excluded. This broader approach would not fit the definition of a ‘named peril,’ as it embraces a wider range of potential incidents. Additionally, the statement regarding coverage applied without regard to loss type does not align with the concept of named perils, which delineates specific types of losses covered. Lastly, stating that coverage only applies to natural disasters limits the scope of named perils but does not accurately represent the full range of risks that might be included in such a policy, which could encompass various other specific perils beyond just natural disasters.

Thus, recognizing that a ‘named peril’ policy protects against only the explicitly listed risks is key to understanding this aspect of property insurance.