Contrary to popular belief, all policies are not created equally. Insurance companies each provide a variety of endorsements (fancy word for coverage options) such as
water back-up or refrigerated food spoilage which are not always included in your policy. If they are not included in the companies standard coverage they may be available as optional coverage for a minimal amount of additional premium.
More important than optional coverages and available endorsements, you need to answer a very basic question about your current policy. Using insurance terms, does my policy provided a “Named Peril” or an “All Perils” form of coverage? In other words, what does my policy cover?
Peril is best defined as a Cause of Loss. If my house catches on fires and as a result is damaged, then Fire is the Peril that caused the damage. An All Perils policy provides coverage for all Causes of Loss other than those defined in the list of policy Exclusions. The alternative is a Named Perils form coverage. This is the less comprehensive of the two and provides coverage for only those Causes of Loss defined in the Covered Perils section of the policy. In this case, the policy Exclusions still apply, but using our original example, if my house catches on fire and my policy does not specifically state that Fire is a covered Peril then the loss is not covered (yipes!).
As always, please review your coverage with your agent to learn more about your policy.
Share This