The world of insurance can be confusing. There are many different types of insurance, and consumers are often left to figure out the intricate details of these policies for themselves. There are two main types of property insurance policies for homeowners: all-risk policies and named peril policies. If you have a claim after a natural disaster or damage caused by an incident at your home, the amount of your reimbursement, if any, will depend on which type of policy you have.
Read on for information about these two types of insurance policies and which one may fit you best.
Understanding these two policies
In an all-risk policy, your insurance company more than likely must provide coverage for your damages. Granted, every insurance policy has some exclusions – items not covered by the insurance – but all-risk insurance policies typically cover numerous kinds of damage. Think of an all-risk policy like a pie and the exclusions as small slices taken away from that pie. An all-risk policy is like that almost full pie tin, covering almost all types of damages caused by almost all types of events.
With a named perils policy, your provider will cover only the types of damages named in your policy for the types of causes specifically covered. If your policy does not explicitly name the peril that caused your loss, you may not receive coverage. Think of that same pie tin, with most of the pie taken away. That is what a named peril policy is like – very little types of coverage for very few events.
Which policy is best for me?
The policy you should purchase depends largely on your individual circumstances. All-risk policies tend to cover a wider range of damages than named peril policies. If you wish to have wider coverage, this may be your best option. If you feel that you do not need as much coverage and only need to be insured for a few specific hazards, then you may prefer a named peril policy. Always check with your mortgagee to see what coverage it requires on mortgaged property. And always deal with an insurance agent who can assist you in selecting the right type and amount of coverage. Your home needs to be covered for the cost to replace it; not for the amount you paid for it.
Still, you should carefully examine your insurance policy to understand all the coverage exclusions. You should also be assertive when it comes to recouping coverage from your insurance provider. Some consumers find that their insurance company will try to deny them coverage for no sound reason. Whether you have an all-risk or a named peril policy, your insurance company owes you the coverage that it promised. If they are not willing to provide you with the coverage you purchased, contact an insurance coverage attorney at Wells Law Group, P.A.