Peril

Reviewed by Stefan Tirschler

Noun

per·il | ˈpɛrəl

Definition: A hazard that could cause loss or damage to property.

The insurance policy wordings state whether or not flooding is a covered peril.

What is a 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.

What perils does homeowner’s insurance cover?

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.

We’ve got full-size definitions for both named perils and comprehensive policies if you’d like to know more.

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:

  • Fire and smoke damage
  • Windstorms and hail
  • Theft
  • Vandalism
  • Impact by vehicles
  • Weight of ice or snow
  • Accidental damage from sudden and accidental escape of water

There are also some perils that are usually excluded from either policy type:

  • Pests (rodents, bed bugs, etc.)
  • Wear and tear
  • Slow leaks from plumbing
  • War or terrorism
  • Nuclear incidents
  • Ground movements (earthquakes or landslides)
  • Flooding (tsunamis or overland floods)

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.

The important points

  • Perils are events or other hazards that cause loss or damage to property.
  • Every home insurance policy describes which perils it covers and which it does not.
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