When you read your home insurance policy, you might see terms like "HO-3" or "HO-5." While they look like code, they define the most important aspect of your coverage: exactly what types of disasters your insurance will pay for. This distinction boils down to Named Perils vs. Open Perils.
Choosing the wrong one could leave you with a massive bill if your home is damaged by something "unexpected."
What is a "Peril"?
In insurance speak, a "peril" is a specific event that causes damage or loss. Common perils include fire, lightning, windstorms, theft, and vandalism.
Named Perils Coverage (The Basic List)
A Named Perils policy covers only the specific events listed in your policy documents. If it's not on the list, it's not covered. Period.
Most basic policies (like an HO-2) cover 16 standard perils:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft
- Vehicles
- Smoke
- Vandalism
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental discharge of water/steam
- Sudden tearing apart/cracking of systems
- Freezing
- Sudden damage from artificial electric current
- Volcanic eruption
The Risk: If you drop a can of paint on your carpet, or a deer crashes through your living room window? Likely not covered, because "clumsiness" and "deer" aren't on the list.
Open Perils Coverage (The "All-Risk" Option)
An Open Perils policy works in reverse. It covers everything that could possibly happen to your home, except for the specific things explicitly listed as exclusions.
Common exclusions usually include:
- Earthquakes and floods (require separate policies)
- War and nuclear hazard
- Intentional acts by the homeowner
- Wear and tear/neglect
- Mold (often limited)
- Pest infestations
The Benefit: If that deer jumps through your window? Covered. If your luggage is stolen while you're in Paris? Covered. Open perils offers significantly broader protection for the strange, unpredictable things that happen in life.
The Most Common Setup: The HO-3
The standard homeowner policy in America is the HO-3 Special Form. It is a hybrid:
- Dwelling (Structure): Covered on an Open Perils basis. (Best protection for the house itself).
- Personal Property (Stuff): Covered on a Named Perils basis. (Your stuff is protected only against the 16 common threats).
If you want Open Perils coverage for both your home and your stuff, you need to ask for an HO-5 Comprehensive Form or add a "Special Personal Property" endorsement to your HO-3.
Comparison Checklist
- HO-2 (Broad Form): Named perils for home + Named perils for stuff. (Cheapest, riskiest).
- HO-3 (Special Form): Open perils for home + Named perils for stuff. (Standard, balanced).
- HO-5 (Comprehensive): Open perils for home + Open perils for stuff. (Best coverage, higher premium).
Don't wait for a claim to find out you aren't covered. Review your policy options today.