What is the Difference between Named Perils and Open Perils on your Insurance Policy?

While comparison shopping for insurance, you will encounter two different types of policies: named perils and open perils policies. Understanding the difference between the two insurance policies will help you determine which one offers the coverage and protection you need.

Both types of insurance policies, open and named, offer coverage and protection. However, the events, risks, and incidents that are covered are the items that will vary under these two types of insurance policies.

Policies that fall under the named perils category have a specific list of risks and events that are covered through this type of insurance policy. The insurance contract you sign to gain coverage under this policy will list the specific events, incidents, and risk categories that are covered. If an event should occur that is not listed on the contract, no coverage will be offered under this particular insurance policy.

An open perils policy offers you a broader, more general type of coverage. Incidents are not forced to fit into a specific category in order to be covered by this type of insurance policy. In fact, open perils policies are sometimes known as all-risk policies because they generally cover any and all risks, incidents, and events.

Insurance carriers may place some restrictions on the type of coverage that is offered under an open perils policy. These restrictions are clearly outlined in the contract at the time you sign up for the policy. Denial of coverage over an incident or event will usually only happen if it falls under one of the restricted categories or events.

The cost of an insurance policy will generally vary depending upon if it is a named perils policy or an open perils policy. Named perils insurance policies will generally cost less than open perils policies. This is a result of the general and open coverage you will typically receive under an open perils policy.

Choosing a named perils policy may save you money, but it might cost you more if you experience an incident or event that is not listed on the insurance policy. Keep in mind insurance policies and coverage restrictions will vary from state to state, and even location to location. Take quotes online using this website in order to find out which type of policy will provide you with the best and most comprehensive coverage for your budget.

Continue to stay on budget and receive the insurance coverage you want and need by spending some time researching and comparing insurance quotes from local insurance providers. Comparing insurance quotes will allow you to see what open perils and named perils insurance policy options and coverages are available for you in your area.