6 Facts About Named Perils

When you buy homeowner's (or renters) insurance, you're buying financial protection against losses pertaining to your personal property, or, “your stuff”. This includes your home's structure, exterior buildings such as a detached garage or garden shed, and everything within the walls of your home such as appliances, furniture, electronics, clothing, artwork, jewelry, etc.

While each homeowner's policy is different and may be custom designed to fit the policyholder's specific needs, the average homeowner's policy provides similar protections.

Named Perils vs. Open Perils 

Standard homeowner's or renters insurance policies protect against what are called “perils,” which are bad things that can happen to your property that cause you to experience financial loss. An “open perils” policy, sometimes called a “named exclusion policy” or an all-risk or comprehensive policy, covers any bad thing that can happen to your personal property except those things specifically excluded in the policy. In a “named perils” policy, however, only the perils specifically listed within the policy are covered. Here are some key factors to understand about named perils:

1. Named perils can basically represent whatever specific protection you desire in your policy, as long as the insurer agrees and you're willing to pay the cost of the policy that they charge for that protection.
2. Most standard policies cover 16 named perils: 1. Fire/lightning damage, 2. Windstorm/hail damage, 3. Explosions, 4. Riot, 5. Being hit by aircraft, 6. Being hit by a vehicle 7. Smoke damage, 8. Vandalism, 9. Theft, 10. Falling objects, 11. Ice, snow or sleet damage, 12. Accidental overflow or discharge of steam or water, 13. Sudden, accidental cracking, burning, bulging or tearing, 14. Freezing, 15. Sudden, accidental damage caused by short-circuiting, 16. Volcanic eruption.
3. Most standard homeowner's policies do not cover for damage due to floods or earthquakes. Coverage for these perils must be obtained by taking out separate policies or having a special amendment to your standard coverage.
4. Compensation for a covered loss under your homeowner's policy will only be paid after subtracting the amount of your deductible.
5. A named perils policy only pays for losses caused by a peril specifically spelled out in the policy. If, for example, it doesn't say you're covered for sewer backup, you aren't. As the insured, the burden is on you to prove that your loss was caused by a named peril in your policy.
6. Because only specific perils are covered, these policies are typically less expensive than open perils coverage.

7 Common Business Insurance Claims

Whatever type of business you're in, one undisputed necessity in running a successful business in Greensboro is the protection provided by quality Greensboro business insurance. When business owners purchase a business insurance policy it's likely not in anticipation of suffering a loss that may occur in the daily running of a business, but more for some catastrophic event such as a fire that will totally devastate their business.

While it's true these types of disasters should be properly protected against with quality insurance coverage, there are numerous smaller risks that businesses face in their day to day activities. It may surprise you to learn what types of losses are most prevalent to most businesses on a regular basis, especially smaller businesses.

The Most Common Business Insurance Claims

A nationally recognized property insurer conducted a study in 2015 consisting of a compilation of claims information submitted by more than one million small business policyholders over a five-year period of time. According to this study, it was estimated that approximately 40% of all small businesses will experience some type of loss, either liability or property, within a 10-year period.

Following are the most common types of claims submitted by small businesses:

1. Burglary/Theft – making up a full 20% of annual business insurance claims, burglaries and thefts may be perpetrated by dishonest employees or by outsiders. These claims include not only the cost of lost products and merchandise, but also the cost of damages suffered by break-ins.
2. Water and Freezing Water Damage – accounting for about 15% of annual business insurance claims, these claims may involve roof damage, broken water pipes or a leaking appliance such as the water heater.
3. Wind/Hail Damage – accounting for another 15% of claims, wind and hail damage can affect your structure, out buildings, automobiles and outside equipment.
4. Fire – causing about 10% of business claims, fire damage can be considerably destructive and expensive to remedy.
5. Slip and Fall Injuries – making up about 10% of business insurance claims, add to this another 5% for injuries caused by something other than a slip and fall such as a heavy object falling off a shelf and hitting someone's head.
6. Reputational Harm – your Greensboro business insurance policy covers you against slander and libel claimed by a third party as damaging to their reputation.
7. Product Liability – representing less than 5% of claims, these claims can be extremely expensive.

3 Insurance Questions Every Homebuyer Should Ask

Before buying a new Greensboro homeowners insurance policy, it's important that, as an educated consumer, you understand the right type and amount of coverage you need. You should be familiar with what a basic Greensboro homeowners insurance policy covers as well as what it doesn't cover. This can best be accomplished by getting together with your trusted insurance agent or broker and carefully reading through the coverage he or she recommends you consider carrying.

A basic Greensboro homeowners insurance policy will contain a minimum of three types of protection. These include:

A. Coverage for losses relating to your dwelling

B. Coverage for losses relating to your personal property/possessions

C. Coverage against liability

Many homeowner's policies also include coverage to pay for additional living expenses if a covered peril prevents you from living in your home for a period of time. Here are some questions you may want to consider while determining what level of protection suits you best:

1. How much would it cost to completely rebuild my home after a total loss? The amount of homeowner's coverage required by your mortgage holder is probably just enough to cover their financial exposure in the event your home is destroyed. This amount, however, may not be enough to rebuild your home in its current location to the same quality level as before your loss. Make sure your insurance coverage amount is enough to rebuild your home to current standards at current costs.
2. What's the value of my personal property? Your personal property (such as clothing, furniture, appliances, electronics, etc.) is protected against a covered loss up to the limits of your policy. Typical homeowner's policies allow benefits in the amount of 50%-70% of the coverage on your home's structure. There are also often specific limits on things like jewelry, artwork, valuable antiques, valuable collections, etc. If your possessions are valued in excess of the limits of your policy, you'll probably want to pay extra premium to obtain limits more realistic to your needs.
3. What level of liability coverage should I have? Liability coverage protects you from losses from lawsuits when accused of being responsible for bodily injury or damage to others. Typical policies limit liability payments at around $100,000, which experts agree is a low amount. Many recommend $300,000 or even more if you have a swimming pool, trampoline, aggressive dog or other high-risk scenarios. For high liability, consider an umbrella policy.