In insurance terminology, what describes coverage that only pays for perils specifically listed in the policy?

In insurance terminology, what describes coverage that only pays for perils specifically listed in the policy?

• A. Named Perils
• B. Open Perils
• C. Hazard
• D. Peril

Answer: (A)

Coverage defined by listing the perils covered is called named perils. In this type, the insurer pays only for losses caused by perils that appear on the policy’s list; any loss from a peril not named isn’t covered. This is different from open perils, which covers all risks of physical loss unless specifically excluded. A hazard is a condition that increases risk, and a peril is the actual cause of a loss, not the method of coverage. Therefore, the option describing coverage that only pays for listed perils is named perils.

Coverage defined by listing the perils covered is called named perils. In this type, the insurer pays only for losses caused by perils that appear on the policy’s list; any loss from a peril not named isn’t covered. This is different from open perils, which covers all risks of physical loss unless specifically excluded. A hazard is a condition that increases risk, and a peril is the actual cause of a loss, not the method of coverage. Therefore, the option describing coverage that only pays for listed perils is named perils.