Named Perils vs. Open Perils Insurance: What’s Actually Covered—and What Isn’t

By: Clinton D. Richey January 15, 2026 1:43 pm

When people ask us about named perils versus open perils, they’re usually trying to answer one question:

“If something goes wrong, will my insurance actually pay?”

The difference between these two policy types often decides that outcome. We see it play out during claims all the time.

The Short Answer

A named perils policy only covers damage caused by risks that are specifically listed in the policy. If the cause of loss is not named, the claim is denied.

An open perils policy (sometimes called “all risk”) covers everything except what the policy specifically excludes.

The most important difference is not the list of risks. It’s who has to prove coverage during a claim.

What “Perils” Really Mean in a Home Insurance Policy

A peril is simply the cause of a loss.

Insurance does not cover damage just because something is broken. It covers damage only if it was caused by a covered peril.

For example:

A ruined ceiling doesn’t matter by itself.
What matters is why the ceiling was ruined.

Was it:

A sudden pipe burst?
Long-term seepage?
A roof leak caused by wind?
Wear and tear?

Policies are written around these causes. That’s why understanding perils is not technical trivia—it determines whether a claim is paid or denied.

Named Perils Explained (How Coverage Works in Real Life)

A named perils policy works exactly how it sounds.

If the peril is named, it’s covered. If it’s not named, it’s not covered.

Typical named perils include things like:

Fire
Lightning
Windstorm or hail
Theft
Vandalism
Explosion
Smoke damage

Anything outside that list is excluded by default.

Where homeowners get caught off guard

We regularly talk to clients who assume:

“It says deluxe named perils, so it must be broad”
“I thought water damage was water damage”
“The damage is obvious—why does the cause matter?”

With named perils, the cause always matters. If the insurer can’t clearly tie the damage to a listed peril, the claim can fail even if the damage is real and expensive.

Open Perils Explained (Why Claims Are Usually Easier)

An open perils policy flips the structure.

Instead of listing what is covered, the policy lists what is not covered.

Everything else is assumed to be covered unless an exclusion applies.

Common exclusions include:

Flood
Earthquake
Wear and tear
Long-term deterioration
Insects or rodents
War or nuclear events

Why this matters during claims

With open perils coverage:

The starting assumption is coverage
The insurance company must prove an exclusion applies to deny the claim

This is why open perils policies tend to result in:

Fewer gray-area disputes
Faster claim resolutions
Less stress for homeowners

It doesn’t mean “everything is covered,” but it does mean fewer surprises.

The One Difference That Matters Most: Burden of Proof

This is the part most policyholders never hear about until something goes wrong.

With a named perils policy

You must prove the damage was caused by a listed peril
If the cause can’t be clearly shown, the claim may be denied

With an open perils policy

The insurance company must prove the damage falls under an exclusion
If they can’t, the claim is generally covered

We’ve seen situations where two homes had similar damage, but:

One claim was approved
The other was denied

The difference wasn’t the damage.
It was the policy structure.

Common Losses People Assume Are Covered—but Aren’t

This is where real-world frustration shows up.

Some of the most common claim disputes we see involve situations like:

Ice dams causing interior water damage
Electrical damage where no visible lightning strike is found
Water damage that wasn’t “sudden and accidental” enough
Property that goes missing without clear proof of theft
Objects falling or vehicles hitting a home in unusual ways

Under a named perils policy, these claims often fail because the cause doesn’t fit neatly into a listed category.

Under an open perils policy, the question becomes: “Is this excluded?”

If it’s not, coverage usually applies.

How Most Homeowners Policies Are Actually Structured

One reason this topic is confusing is that most homeowners insurance policies are not purely named perils or purely open perils.

They’re usually a mix.

In many standard policies:

The home itself is covered on an open-perils basis
Personal belongings are covered on a named-perils basis

This structure is common in what’s known as an HO-3 policy, which is still the most widely used homeowners policy in the U.S.

Why this matters

We often hear: “I thought I had open perils coverage.”

What that usually means is:

The structure is open perils
The contents are not

That distinction becomes very real when something goes missing, electronics are damaged, or there’s unclear cause of loss inside the home.

Upgrading to broader coverage—often called HO-5 or “special form”—can extend open-perils coverage to personal property as well, but it depends on the carrier, the home, and eligibility.

Cost vs. Risk: When Paying Less Becomes More Expensive

Named-perils policies are cheaper for a reason.

They shift more risk onto the homeowner.

That doesn’t automatically make them bad, but it does mean the savings come with trade-offs.

We see the cost conversation go wrong when homeowners compare premiums without comparing exposure.

Saving a few hundred dollars a year can feel good—until a single uncovered loss turns into a five-figure out-of-pocket repair.

Open perils coverage typically costs more because:

It covers a wider range of loss scenarios
It reduces claim disputes
It limits gray areas

The right question isn’t: “Which policy is cheaper?”

It’s: “What losses would I be forced to pay for myself?”

When a Named Perils Policy Can Make Sense

Despite the limitations, there are situations where a named-perils policy may be appropriate.

We see it work best when:

The home is older or has underwriting restrictions
The property is not a primary residence
Budget constraints are real and unavoidable
The homeowner understands and accepts the gaps

Sometimes carriers will only offer named-perils coverage due to:

Roof condition
Claims history
Property age or location

In those cases, the goal isn’t perfection—it’s informed decisions and filling gaps where possible.

The Most Important Questions to Ask Before Choosing Either Policy

Before selecting a policy, we walk clients through questions like these:

Is the dwelling covered on an open-perils or named-perils basis?
How is personal property covered?
What are the most common exclusions for this carrier?
Is the roof covered at replacement cost or actual cash value?
Are water-related losses clearly defined?
Do valuable items need to be scheduled separately?
Are endorsements required to avoid common claim denials?

These answers matter far more than the label on the policy.

How We Help Clients Avoid Coverage Gaps at Richey Insurance Agency

At Richey Insurance Agency, our job isn’t to push one policy type.

It’s to prevent surprises.

That means:

Reviewing policies line by line
Comparing how different carriers handle exclusions
Explaining real claim scenarios—not hypotheticals
Identifying where named-perils coverage may fall short
Recommending upgrades only when they actually reduce risk

We focus heavily on claims behavior, because the true value of coverage shows up after something goes wrong.

Bottom Line: Which Coverage Is Right for You?

Named perils coverage is straightforward and affordable—but limited.

Open perils coverage is broader, more flexible, and easier to navigate during a claim.

Neither is “good” or “bad” by default.

The right choice depends on:

How much risk you’re willing to carry
How predictable your property risks are
Whether you want certainty or lower premiums
How important claim simplicity is to you

If you understand what’s covered, what isn’t, and why, you’re already ahead of most homeowners.

And if you want help reviewing your options, we’re here to walk through them—clearly, honestly, and without pressure.