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If you have not had a reason to make a property damage insurance claim before, then you probably assume that if you pay your premiums, then your home is covered against anything or everything that could possibly happen.

You would assume wrong….

Your insurance policy is a contract. In exchange for your payments (called premiums), your insurance company promises to make payment to you for your damaged property…BUT ONLY IF your damage was created by a “cause of loss” that is covered under the policy.  But what is a covered “caused of loss”?

A covered “cause of loss,” is a “peril” that your insurance company insures you against. However, different policies cover different perils. There are two basic kinds of property insurance policies:

1. The “named perils” policy (also known as a “broad form” policy). A “named perils” policy will pay for property damage that results ONLY from the exact list of perils (causes of loss) listed in the policy. The typical named perils policy contains the types of  losses that you would expect to be covered (fire, lightning, windstorms, hail, explosions, non-flood water damage and some others). However, even with a “named perils” policy, you’ll see that some insurance companies add or exclude or limit coverage for certain typical named perils. If a type of peril is not specifically named, then it is not covered.
2. The “all risks” policy (also known as a “special” form policy). An “all risks” policy on the other hand covers your home against “all risks” (i.e., everything) that can damage it EXCEPT for perils that are specifically listed as EXCLUDED by the policy. Typical excluded perils include flood, earth movement and pollution. If a peril is not specifically identified on a list of exclusions, then it is a covered “cause of loss”. All risk policies tend to be more expensive because they cover more risks.

If you’ve experienced sudden or unexpected damage to your home, contact us today to evaluate your coverage.