Glossary
Named-peril policy, defined
A form that covers loss only from causes it specifically lists, such as fire, lightning, windstorm, hail, theft or vandalism. Anything not on the list is not covered, and the burden is on the policyholder to show the damage came from a listed cause.
In practice
Basic and broad home forms, most renters contents coverage, and the contents portion of a standard HO-3 are written this way; dwelling fire forms for rentals often are too. The gap shows up with causes that are common but unlisted: a heavy object dropped on a floor, a pet's damage, or water that seeps rather than bursts. Read the list on the form, not the marketing summary. Where a client wants broader protection for contents, an open-peril endorsement or a higher-tier form is usually available for a modest difference in premium. The analysis states which causes are covered and, more usefully, which are not.
A worked example
Suppose a renter's contents are insured on a named-peril form listing sixteen causes. A bookshelf collapses and crushes a $1,200 television. Collapse of furniture is not among the listed causes, so the claim is denied. Suppose the same television had been stolen; theft is listed, and the policy would pay $1,200 less the deductible. Hypothetical, to show that the cause of loss decides the claim.
Applies to: Renters InsuranceHome Insurance