Named perils
Named perils coverage pays for property damage caused by causes of loss specifically listed in the policy, such as fire, theft or windstorm. Damage from an unlisted cause is generally not covered under that coverage section. The exact list, deductible, limits and endorsements are in the policy and can differ by coverage section.
Also called: named peril, named peril policy, named perils policy, covered perils, covered peril
When a policy covers named perils, the first question after a loss is whether the cause of the damage is on the list. The Connecticut Insurance Department (opens in a new tab) says named-perils policies list exactly what is covered, while open-perils policies list what is excluded. Even when the cause is listed, the deductible, exclusions, limits and claim conditions still decide the payment. One policy can also use different methods for different parts, such as open perils for the dwelling and named perils for personal property.
How a named-perils claim adds up
The New York Department of Financial Services publishes a sample homeowners declarations page (opens in a new tab) with a $345,000 dwelling limit, a $241,500 personal-property limit, a $103,500 loss-of-use limit and a 5% hurricane deductible shown as $17,250. The deductible is $345,000 × 5% = $17,250. Suppose a covered hurricane causes $50,000 of covered dwelling damage.
Hover or tap a row to highlight it.
| Item | Amount |
|---|---|
| Covered dwelling damage (illustrative) | $50,000 |
| Hurricane deductible (5% of $345,000) | $17,250 |
| Insurer payment | $32,750 |
You bear the first $17,250, and the insurer pays the remaining $32,750, subject to the policy wording, depreciation and available limits. The limits and deductible come from the DFS sample, and the $50,000 loss is an illustration. If the damage came from flood or storm surge, a listed peril would not create coverage, because the sample page identifies a separate flood form and states that the homeowners policy does not cover flood loss.
Forms and deductibles that change the answer
The form number tells you which method applies, according to the New York Department of Financial Services (opens in a new tab).
- HO-1 Basic. Named perils for the dwelling and contents, with limited coverage. The NAIC lists fire, lightning, windstorm and theft as examples.
- HO-2 Broad. Named perils for the home and personal property, with a longer list than HO-1.
- HO-3 Special. Generally open perils for the dwelling and other structures, with named perils commonly applying to personal property.
- HO-5 Comprehensive. Generally open perils for both the dwelling and personal property, subject to exclusions.
- HO-4 Renters and HO-6 Condominium. These cover personal property and liability, and HO-6 also covers specified portions or improvements of the unit.
Deductibles come in three common shapes. A flat deductible might be $250, $500 or $1,000. A percentage deductible is calculated against the dwelling limit, as in the example above. A separate windstorm or hurricane deductible can apply to those events, and the NAIC (opens in a new tab) says named-storm deductibles run from 1% to 15% in some coastal states. A named peril and a named storm are different things: the first is a coverage method, and the second is a weather trigger for a deductible. Higher deductibles generally reduce premium because you keep more of each loss, and replacement-cost coverage pays without deducting depreciation when its conditions are met.
Where you will see named perils
The term appears in homeowners forms, renters policies (generally HO-4), condominium unit-owner policies (generally HO-6), dwelling-fire and landlord policies, and commercial property forms that list covered causes of loss. On auto physical-damage coverage, "specified causes of loss" is a named-perils option. In the paperwork, look for it in the quote, the declarations page (often as a form number), the "perils insured against" section, endorsements, a renewal notice and a claim letter. The declarations page shows the form, deductibles, limits and endorsements, and the complete policy wording controls the covered causes. If you rent, the guide on whether renters insurance covers theft and the Connecticut renters insurance guide show how this plays out.
What Connecticut and New York add
Neither state requires every homeowners policy to use named perils or open perils; the policy form decides. The Connecticut Insurance Department says a Form 2 policy names covered perils and a Form 3 policy covers perils unless excluded. Conn. Gen. Stat. § 38a-316a (opens in a new tab) permits a hurricane deductible for qualifying policies when its hurricane-warning and wind-speed conditions are met, and the department's storm claims page (opens in a new tab) says insurers may offer windstorm or hail deductibles but may not mandate them.
In New York, Insurance Law § 3445 (opens in a new tab) addresses hurricane deductibles, and Regulation 159 (opens in a new tab) governs homeowner disclosure information. DFS describes HO-2 as a broad named-perils form, so check the declarations page for the form, deductibles and endorsements.
Questions to ask your agent or insurer
- Which exact causes of loss are named for the dwelling, other structures, personal property and loss of use? One policy can apply different methods to different sections.
- Is my policy an HO-1, HO-2, HO-3, HO-4, HO-5, HO-6 or a carrier-specific form, and which endorsements change the list? Endorsements can add or remove causes of loss.
- What deductible applies to wind, hail, hurricane or named storm, and is it flat or a percentage of the dwelling limit? A percentage deductible can be much larger than the ordinary one.
- Are flood, storm surge, earthquake, sewer backup and water seepage covered, excluded, or available by endorsement or separate policy? Several commonly assumed causes are excluded from standard homeowners coverage.
- If I file a claim, what evidence must show a named peril caused the damage, and will payment use replacement cost or actual cash value? Cause, proof, valuation and depreciation all affect the payment.
Frequently asked questions
These answers cover the follow-up questions that come up most.
Is an HO-3 policy named perils?
Usually HO-3 uses open perils for the dwelling and other structures and named perils for personal property, and the insurer's form and endorsements control. A public sample HO-3 form from the Insurance Information Institute (opens in a new tab) insures the dwelling against "risk of direct physical loss" and covers personal property for a "Peril Insured Against."
Does a named-perils policy cover flood?
Only if the policy specifically includes flood coverage. Standard homeowners policies generally exclude flood, according to the Connecticut Insurance Department (opens in a new tab), and separate flood insurance may be required.
What is a named-storm deductible?
It is a deductible triggered by a policy-defined hurricane or named-storm event, and it may be a flat amount or a percentage of the dwelling limit, according to the NAIC (opens in a new tab). It is separate from the named-perils method.
Is "comprehensive perils" the same as open perils?
"Comprehensive" commonly describes the HO-5 form, which DFS says covers the dwelling and personal possessions for all risks of physical loss except specifically excluded risks. The word describes a form, and the policy wording sets what is covered.