Named Perils Insurance Policy Law and Legal Definition

Named perils insurance policy is a type of home insurance policy which covers losses incurred to a homeowner’s property from hazards or events listed in the policy. For example: A homeowner who does not live in an earthquake prone area will only be concerned about certain other perils like fire or flood. He can opt for a named perils policy and only declare coverage against fire or flood, while leaving the earthquake coverage off the policy. These policies are purchased as a less expensive alternative to policies that tend to offer coverage to most perils. These policies spell out the specific events for which a homeowner is covered. The cost of the premium depends upon the location of the property and the likelihood of the perils.