What Is Open Peril Coverage for Homeowners?

Open peril coverage, also known as all perils or all-risk insurance, is a type of homeowners coverage that insures your home and belongings against damage from any source as long as your policy does not specifically list it as an exclusion.

Read below to find out what an open perils policy typically does and doesn’t cover and how you can secure this broad coverage for your home.

On This Page

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  What Is an Insurance Peril?

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  What Is Open Peril Coverage?

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  What Is Covered by an Open Perils Policy?

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  Which Home Insurance Policies Have Open Perils Coverage?

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  What’s the Difference Between Named Perils and Open Perils Coverage?

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  Who Is Open Perils Coverage Best For?

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  How To Get Open Perils Coverage for Your Home

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  FAQs

What Is an Insurance Peril?

In homeowners insurance terms, a peril is an event that can result in the damage or loss of your property such as a fire, windstorm or home invasion. If the peril is covered by your insurance policy, then your insurance provider will reimburse you for your losses anytime that peril inflicts damage on your home or belongings.

After a covered peril impacts your home, you can document your losses and file a homeowners claim. You’ll pay a deductible up front and then you can receive a payout from your insurance company up to your coverage limits in order to help you repair or replace whatever was damaged. Alternatively, your loss of use coverage can help cover expenses associated with temporarily living somewhere else if your house becomes uninhabitable because of a covered peril.

What Is Open Peril Coverage?

An open peril home insurance policy provides coverage for any peril that impacts your property unless your policy explicitly excludes that peril. Although it is sometimes known as all-risk coverage, it does not actually cover every conceivable source of damage to your home since every policy will include a list of exclusions.

The most common type of home insurance policy is HO-3 insurance, which accounted for more than 78% of all policies among American homeowners in 2020.^[1] If you have an HO-3 policy, then your insurer will provide you with dwelling coverage on an open perils basis and personal property coverage on a named perils basis.

What Is Covered by an Open Perils Policy?

Open perils policies broadly cover perils that cause sudden damage to the structure of your home or your belongings, except for those excluded by the policy. For example, if dust particles got into your home during a dust storm and rapidly damaged your electronics, your policy should cover the damage as long as dust storms aren’t listed as an exclusion. Conversely, this scenario would not be covered by a named perils policy since dust storms are not typically among the perils those policies cover.

What Isn’t Covered?

Insurance generally doesn’t cover gradual damage and open peril coverage is no exception. So while this kind of policy may cover damage caused by a dust storm, it would likely exclude damage caused by dust that built up because you failed to keep your house clean. Similarly, it won’t cover wear and tear, rust, corrosion, asbestos, mold, infestations and other preventable losses.

In addition, open perils policies commonly exclude some sudden sources of damage or loss like the following:

• Floods, sewer backups and sump pump overflows
• Earthquakes, mudflows, landslides and sinkholes
• Power failures that originate outside of your property^[2]
• Mechanical or electrical breakdowns
• War and nuclear hazards
• Chemical spills
• Identity theft
• Government condemnation or confiscation of property
• Enforcement of local building codes
• Pets

Your homeowners policy will also likely exclude coverage for losses related to a business you operate out of your home. Meanwhile, your insurance company will reject claims related to intentional losses because purposefully damaging something you own in the hopes of collecting an insurance payout qualifies as insurance fraud.

Keep in mind that you may be able to bypass some of these exclusions by paying for extra coverage types such as flood insurance, earthquake insurance, equipment breakdown coverage, ordinance or law coverage and commercial insurance.

Which Home Insurance Policies Have Open Perils Coverage?

Here’s an overview of the major types of homeowners insurance policies and whether they include open peril coverage for your dwelling and personal property.

What’s the Difference Between Named Perils and Open Perils Coverage?

While open peril homeowners insurance covers any source of damage that isn’t mentioned in the policy, named peril coverage only covers sources of damage that are mentioned in the policy. As a result, if a peril isn’t listed in your named perils policy, it is excluded from coverage.

In general, the most basic types of named perils insurance, HO-1 and HO-8 policies, only include coverage for the following 10 perils.

Meanwhile, the other kinds of named perils policies also typically cover these six perils.

Who Is Open Perils Coverage Best For?

An open peril policy is best suited for someone who lives in an area that is prone to perils that aren’t covered by a typical named peril policy. For example, dry heat could cause wooden furniture you keep outdoors to suddenly crack. Since named peril coverage doesn’t account for heat waves, you might opt for open peril coverage if you live in an arid region.

In addition, you may be willing to pay the higher price for open peril coverage simply to receive the extra peace of mind it provides.

Unlike a named perils policy, an open perils policy can provide coverage for numerous situations you may not even think about when purchasing insurance, making it a much more extensive coverage option overall.

How To Get Open Perils Coverage for Your Home

To get home insurance with open perils coverage, you should take the following steps:

1. Collect important information like your personal details, prior insurance and claims history, home information and mortgage information.
2. Decide whether you need open peril coverage for both dwelling and personal property insurance and determine what your coverage limits should be.
3. Compare home insurance quotes from multiple insurance providers to see which company can provide you with the best rate for open perils coverage.
4. Ask an insurance agent if you can bundle policies or take any other steps to get a home insurance discount.
5. Buy a policy and continue to comparison shop to see if you can get better coverage elsewhere down the line.