Know Your Policies! Named Perils Vs. Open Perils

In everyday life, we never really think about what happens next if some sort of damage occurs to our house, car, or anything else. As fall has arrived and winter is on the move, it’s important to keep these thoughts in mind. What if your pipes freeze and, subsequently, burst? What if the weight of the snow from a massive snowstorm causes the roof of your garage to cave in? You will need to make sure that your property is covered properly!

The causes of loss, while devastating to anyone with property of some sort, can be described in one of two ways – on either a “named peril” or an “open peril” basis. Knowing the difference between the two different types of coverage will help you validate that your property is insured properly and can help you understand what is included and excluded under each separate mode of coverage as well!

Named Perils Coverage Policy

This type of policy lists the specific perils or causes of loss that are all covered under this policy. This means that you will be covered for everything listed underneath the coverage but not for anything that doesn’t appear on that list. If, for instance, your home is covered by “volcanic ash,” as it is listed in your named perils policy, then any damages that might be caused by volcanic ash will be covered! If it isn’t listed on your policy and you wind up getting damage to your house by said ash, then it won’t be covered.

Here is what typically appears on “named perils” policies:

*Lightning or fire

*Hail or windstorm

*Damage caused by aircraft

*Explosions

*Riots or civil disturbances

*Smoke damage

*Damage caused by vehicles

*Theft

*Vandalism

*Falling objects

*Volcanic eruption

*Damage from the weight of snow, ice, or sleet

*Water damage from plumbing, heating, or air conditioning overflow

*Water heating cracking, tearing, and burning

*Damage from electrical current

 

Keep in mind, too, that the “named perils” policy is not meant to be exhaustive, and exclusions will be determined based on whether they are listed as named perils.

 

Open Peril Coverage Policy

This type of coverage is the exact opposite of the “named peril” policy. In this type of coverage, everything is covered except those perils listed as exclusions. So, going back to the “volcanic ash,” if you find that this isn’t specifically named as an exclusion, it will be covered along with all the other perils that are not listed. You’ll find, however, that open peril policies tend to be full of long lists of exclusions, but they still offer great coverage for your property!

If you’re thinking about getting an insurance policy, take a moment to ask yourself which type of policy would suit your needs best. You can always ask the knowledgeable and caring professionals here at Madison Mutual as well! Call us today at 1-800-766-MMIC or find us online at www.madisonmutual.com to learn more!