All Risk Insurance - Home Insurance

What is All Risk Insurance?

<lingo>All risk insurance is a type of insurance policy that covers any risk that isn't explicitly excluded in the contract. Also known as special perils or open perils insurance, this type of policy automatically covers all losses and damages, except for those specifically named as exclusions. 
Commonly excluded perils may include damages caused by flooding, earth movements, war, infestation, pollution, wear and tear, or seizure by the government. In some cases, homeowners may have the option of choosing to pay for additional coverage of a specific, excluded peril. Because all risk insurance protects against the greatest number of potential losses, it tends to cost more than other types of coverage.</lingo>

All Risk Insurance Explained

As its name suggests, all risk insurance offers comprehensive coverage against a great number of potential perils. The only risks this type of policy doesn't protect against are those specifically listed as excluded. In contrast, "named perils" insurance protects only against explicitly named risks.

<twitter>All risk insurance is a type of insurance policy that covers any risk that isn't explicitly excluded in the contract. Also known as special perils or open perils insurance, this type of policy automatically covers all losses and damages, except for those specifically named as exclusions. </twitter>

For example, a homeowner may purchase a policy that states it will only reimburse loss caused by fire, theft and vandalism. If the house then sustains damage in a windstorm, the policy will not cover that loss. In contrast, an all risk policy will cover any loss as long as it's not specifically excluded in the contract. Some insurers offer combination named peril and all risk coverage; usually, homeowners choose an all risk policy for their home and a named peril policy for their belongings.

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