Named Perils Policy: What Is Covered?

A named perils insurance policy is a type of home insurance policy where you are covered only for the losses specifically listed in your policy. For most standard home insurance policies, named perils coverage applies only to your personal property, while your home's structure has broader protection under open perils coverage.

Keep reading to learn how a named perils policy works and how it compares to an open perils policy.

On This Page

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  What Is a Named Perils Policy?

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  What Does a Named Perils Policy Cover?

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  Open Perils Policy vs. Named Perils Policy

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  Which Policy Is Right For Me?

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  Named Peril Policy FAQs

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  The Best Homeowners Insurance for You

What Is a Named Perils Policy?

A named perils policy is a home insurance policy that covers only the losses specifically listed in your policy. Any cause for losses not listed in your policy would not be covered by your insurance company. You can find more information about what's covered and what's not in the declarations page in your policy.

Below are the 16 named perils that are commonly referenced in a named perils policy:

Named perils policy example

Let's say your named perils coverage only lists fire damage as a covered loss but not falling objects. A fire burning down your home would be a covered claim, but a tree branch falling on your roof would not.

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What Does a Named Perils Policy Cover?

A named perils home insurance policy commonly references two different types of coverage: dwelling and personal property. Dwelling coverage refers to the actual structure you live in, while personal property coverage includes your home's contents (e.g., clothes and furniture). Your coverage will depend on the type of homeowners insurance policy you choose.

A named peril policy covers only the perils specifically listed in your home policy.

Here is a summary of what the different types of named perils policies cover. Note that HO-5 is an open peril policy and is not listed below but would cover all of the listed perils unless excluded in the policy.

HO-1 and HO-8 policies offer the most limited coverage, protecting your dwelling from only 10 out of 16 named perils. An HO-2 policy provides additional coverage, protecting you from all 16 named perils. Most carriers do not sell HO-1 and HO-2 policies.

An HO-3 policy is considered standard home insurance and is sold by virtually all home insurance companies. An HO-3 policy has named perils coverage on personal property only. Dwelling is covered under an open perils policy (more on that next). An HO-5 policy offers more comprehensive coverage, protecting your dwelling and personal property from all perils except those excluded in your policy.

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Open Perils Policy vs. Named Perils Policy

A named peril policy provides coverage for the perils listed in your policy and ONLY those perils. For example, say your named peril home insurance policy covers you only against fires and windstorms. You would have coverage for wildfires and a strong gust of wind but not for damages from falling objects and hail.

An open-peril policy (also called all an risk policy) will cover all perils EXCEPT those that insurers specifically exclude in the policy. Specific perils commonly excluded in open-peril policies are damages from an earthquake, flood, nuclear hazard, and mold.

Which Policy Is Right For Me?

Most homeowners will have a mixture of named perils and open perils coverage. HO-3 policies, the most commonly purchased home insurance policy according to the National Association of Insurance Commissioners, provides you with open perils coverage on your dwelling and named perils coverage on your personal property.

HO-1 and HO-8 policies offer the most limited coverage, protecting your dwelling from only 10 out of 16 named perils.

Here is a summary of the available types of home insurance policies and their respective coverages:

HO-5 insurance is ideal if you want open perils coverage on both dwelling and personal property.

While rarely sold, HO-1 and HO-2 policies may be ideal if you're comfortable paying less for less extremely limited coverage.

If you own an older home, then you may only qualify for an HO-8 policy.

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A covered peril refers to a peril that your insurance company will cover if you suffer damages or losses from that event.

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