Insurance Term of the Day: Named peril
Itโs getting late on a Full Moon Halloween night. After getting home from taking the kids trick-or-treating, you give them baths and tuck them in to sleep. Closing the bedroom door, you walk down the hallway, shutting off the lights. As you descend the stairs to your bedroom, the hallway light flickers back on. โStrange,โ you think, as you walk back up to turn the light off again. Reaching the top of the stairs, youโre stopped dead in your tracks as you notice a black silhouette standing right beside the light switch at the opposite end of the hallway. Youโre stunned, and you canโt move. Suddenly, thereโs an awful shriek, that mimics laughter from the ghost, as โitโ shuts the light back off. Youโre trapped in the dark. You still canโt move, and your heart is racing faster than ever. Untilโthe ghost flickers the light back on, off again, on again, in a never-ending cycle. โStop it!โ you yell, โyouโre going to start a fire!!!โ You bolt in the direction of the light switch, and the ghost is gone, leaving behind a burst of flames in the hallway. โHow will my insurance company ever believe this?!โ you scream as you gather the kids and call nine-one-one.
Peril means danger, but in insurance terms, could be better explained as a risk that could result in damage. If you have a โNamed Perilโ homeownerโs policy, this means that there is a list of specific risks that are covered by your policy. Examples of named perils include fire or lightning, aircraft, vehicles, smoke, theft, and windstorm. If you need to file a claim, itโs your job as the insured to show your loss is covered through a listed peril. Anything not listed in the named perils is excluded from your coverage. For example, if the ground shifts, causing the foundation of your home to crack, you wouldnโt be covered because โEarth movementโ is an exclusion on the homeownerโs policy. However, in the scenario described above, youโd be covered under โfire,โ but good luck explaining what happened without getting looked at like youโre crazy.
Itโs always beneficial to talk to your agent about what kind of perils you can add onto your homeownerโs policy.
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