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A basic guide to insurance perils

by Angela Conterno 04/26/2023

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Insurance perils are specific events covered in your policy. It's important to understand the limits of your homeowners insurance policy, especially any excluded perils. Here's a quick guide to the basics:

Perils commonly covered by insurance

A named perils plan covers 16 types of peril. However, it's not a universal list. For example, wind damage is not included in certain coastal zones and must be separately endorsed.

How peril, hazards & risk differ

The words risk and danger are similar to each other and are sometimes used interchangeably. However, insurance counts them as separate things. A risk is the possibility of a loss, while a peril or hazard is the actual cause of a loss.

Types of home insurance risks

Some common examples of insurance risks include:

  • Swimming pools.
  • Fireplaces.
  • Outdoor fire pits or ovens.
  • Pets.

The HO-2, HO-3 and HO-5 types of homeowners policies determine if your policies are defined against a set of specific risks based on location or home features.

Who is most affected by a home insurance peril?

A homeowner is affected by the perils insured in their policy, but so is the insurance company. Increased risk and covered perils both pose a higher cost to your insurer, which can increase the cost of your coverage.

Your mortgage lender could also be indirectly affected by home insurance risk because damage could negatively affect your home's value. To determine the specifics of your homeowners insurance, consult your provider for details.

About the Author
Author

Angela Conterno

Angela is a San Pedro and Palos Verdes native, and is very familiar with the benefits of living in this wonderful coastal area of Southern California. As a key member of the family real estate business, Henry Falkenstein & Associates, she is able to service clients in San Pedro, Palos Verdes and the South Bay areas with ease. Whether you're a "first time" home buyer, a home seller or seasoned investor, she will ensure that you have all the necessary data and resources to make completely informed decisions about your real estate transactions. Her job as your Realtor isn't complete until you are 100% satisfied with her service!