Reviewed by Stefan Tirschler
Updated September 8, 2022
per·il | ˈper-əl
Definition: A hazard that could cause loss or damage to property.
The insurance policy wordings state whether or not flooding is a covered peril.
Perils are the events that cause loss or damage to property.
Fire, flooding, or vehicle impact are all examples of perils.
When it comes to home insurance, perils take many forms, all of which pose a threat to the home, the property it sits on, or the stuff inside it. There are natural disaster perils, like earthquakes, tsunamis, or volcanic eruptions. There are weather-related perils, like hail, windstorms, or lightning. There are perils that come from direct human action, like theft or vandalism. Then there are the infinite other perils like fire, nuclear disaster, war, explosion… the list goes on.
Insurance policies use perils to describe what kinds of damage or loss the policy will cover. No insurance policy covers every peril; that would bankrupt the insurance company faster than they could print the policy documents. Instead, insurance policies separate perils into covered and excluded perils.
When it comes to covered perils, there are essentially two types of home insurance policies: named perils and comprehensive.
Named perils home insurance policies include a list of perils that are covered. Any peril not on the list is excluded.
Comprehensive policies are the opposite: they include a list of perils that are excluded, and any peril not on the list is covered.
There is no universal list of perils that are covered and perils that are excluded; each insurance company has their own offering.
However, there are a few perils that almost every home insurance policy covers, whether it’s a named perils or a comprehensive policy:
There are also some perils that are usually excluded from either policy type:
Not every policy is the same; for example, most policies sold by Square One include earthquake coverage or inland flood coverage.
If you’re unsure which perils your own home insurance policy offers protection against, make sure to check your policy documents. You should never assume your policy covers a peril just because other policies do.
Looking for another insurance definition? Look it up in The Insurance Glossary, home to dozens of easy-to-follow definitions for the most common insurance terms. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
About the expert: Stefan Tirschler
Stefan is responsible for underwriting leadership, market expansion, and product research and development for Square One's operations. Stefan has earned his Fellow Chartered Insurance Professional designation, and maintains a level 2 general insurance license in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. Stefan is also an Education Committee member and CIP/GIE instructor for the Insurance Institute of Canada.
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