What type of coverage protects against risks that are specifically named in the policy?

What type of coverage protects against risks that are specifically named in the policy?

• A. Comprehensive coverage
• B. Named perils coverage
• C. Exclusion coverage
• D. All-risk coverage

Answer: (B)

Named perils coverage is a type of insurance that specifically lists the risks or perils that are covered under the policy. This means that if a peril is not explicitly mentioned in the policy, any loss or damage resulting from that peril would not be covered. This approach allows policyholders to have a clear understanding of which specific hazards they are protected against, making it easier to evaluate their coverage. For example, a named perils homeowners policy might cover risks such as fire, theft, and vandalism, but if a loss occurs due to an earthquake and it is not listed as a covered peril, the claim would likely be denied. In contrast, comprehensive coverage generally refers to a broader level of protection, covering a wider array of risks unless specifically excluded, while exclusion coverage identifies what is not covered. All-risk coverage, sometimes referred to as open perils or all-perils, protects against any risk not excluded in the policy, representing an opposite approach to named perils coverage. This distinction is critical for understanding how different types of insurance policies operate and what level of risk protection they provide.

Named perils coverage is a type of insurance that specifically lists the risks or perils that are covered under the policy. This means that if a peril is not explicitly mentioned in the policy, any loss or damage resulting from that peril would not be covered. This approach allows policyholders to have a clear understanding of which specific hazards they are protected against, making it easier to evaluate their coverage.

For example, a named perils homeowners policy might cover risks such as fire, theft, and vandalism, but if a loss occurs due to an earthquake and it is not listed as a covered peril, the claim would likely be denied.

In contrast, comprehensive coverage generally refers to a broader level of protection, covering a wider array of risks unless specifically excluded, while exclusion coverage identifies what is not covered. All-risk coverage, sometimes referred to as open perils or all-perils, protects against any risk not excluded in the policy, representing an opposite approach to named perils coverage. This distinction is critical for understanding how different types of insurance policies operate and what level of risk protection they provide.