What exactly is an ‘insured peril’? (2024)

FAQs

What is an insured peril? ›

An insured peril is a risk that is covered under the policy, while an uninsured peril is not. Insured perils, for example, often include fire and theft, so if one of these results in a partial or total loss of the property, the policy covers the damage.

In the world of insurance, a “peril” is an event or circ*mstance that could result in property damage. Your homeowners, condo, or renters policy contains a list of covered perils, such as fire, lightning, and vandalism.

A peril is a potential event or factor that can cause a loss, such as the possibility of a fire that could engulf a house. A hazard is a factor or activity that may cause or exacerbate a loss, such as a can of gasoline left outside the house door or a failure to regularly have the brakes of a car checked.

Here are a few examples of some typical uninsurable perils:

Earthquakes. Ongoing leaks. Insects and rodent infestations. Melting or moving snow and ice.

Some commonly named perils include fire, lightning, windstorm, hail, explosions, theft, vandalism, riot or civil commotion, aircraft, vehicles, smoke, volcanic eruption, falling objects, weight ice, snow, or sleet, accidental discharge of water or steam, freezing of plumbing, and electrical damage.

Uninsurable perils are events for which insurance coverage is not available or for which insurers are unlikely to underwrite policies. An uninsurable peril is typically an event with a high risk of occurrence.

peril n. 1 : exposure to the risk of death, destruction, or loss. 2 : the cause of a loss (as of property) [insured their home against fire, floods, and other s] compare risk.

An insured peril is an event that can cause damage or loss to a property but is covered by an insurance policy that pays for the loss or damage if it occurs.

1. : exposure to the risk of being injured, destroyed, or lost : danger. fire put the city in peril. 2. : something that imperils or endangers : risk.

What is an example of a peril risk? ›

A peril is the direct cause of a loss, or the source of the loss. For example, if your house is damaged by a lightning strike, the lightning strike is considered to be the peril. If your house catches on fire, then fire will likely be considered the peril.

Final answer: A peril in insurance terms means a specific cause of loss. It reduces financial risk by providing compensation for the occurrence of the insured event. This means that a peril is the cause of potential loss or damage that an insurance company agrees to cover.

In insurance, the definition of peril is any event, situation, or incident that causes property damage or loss. Fire, theft, wind, and vandalism are common perils that homeowners insurance can cover.

A peril is an event, like a fire or break-in, that may damage your home or belongings. The perils covered by your homeowners insurance are listed in your policy.

Examples of commonly excluded perils in property insurance might include earthquakes, floods, intentional acts, or wear and tear.

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.

While peril is the cause of the risk, its probability of occurrence as well as its amount of loss may be increased or decreased due to the presence of certain factors. These are known as Hazards. For example, while cancer is the cause of death, the chance of suffering from cancer can be increased by smoking.