Named perils vs. open perils home insurance

How policies define what they cover

Named perils and open perils describe two different ways an insurance policy defines what events (perils) trigger a covered claim. Understanding the difference tells you how broadly you are protected.

Named perils

A named perils policy lists the specific events it covers. If the cause of damage is not on the list, the claim is denied. Common named perils include:

• Fire and lightning
• Windstorm and hail
• Explosion, riot, aircraft, vehicles
• Smoke, vandalism, theft
• Volcanic eruption, falling objects
• Weight of ice, snow, or sleet
• Freezing of pipes, accidental discharge of water
• Power surge (sudden and accidental)

If an unusual event damages your home and it isn't on the list, you have no coverage.

Open perils (also called all-risk or special form)

An open perils policy covers all causes of loss except those explicitly excluded. Instead of listing what's covered, it lists what is not covered. If a peril isn't on the exclusion list, it is covered.

Common exclusions on open perils policies:

• Flood
• Earthquake and earth movement
• Normal wear and tear
• Intentional acts
• Government action
• Nuclear hazard
• Fungus and mold (may be available as an endorsement)

The practical difference

A tree limb falls through your roof during calm weather with no storm in progress.

• Under open perils: likely covered. Falling objects is not on the exclusion list.
• Under named perils: depends entirely on whether "falling objects" is a listed peril. If it is not listed, the claim is denied.

Open perils catches unusual losses that named perils would deny.

HO-3: the most common home insurance form

The HO-3 policy form uses a hybrid approach:

• Coverage A (dwelling): open perils. Your home structure has broad coverage.
• Coverage C (personal property): named perils. Your belongings are covered only for the listed events.

HO-3 is the standard for most NC homeowners and the right starting point.

HO-5: open perils on everything

The HO-5 form applies open perils to both the dwelling and personal property. This gives your belongings the same broad coverage your home structure has. HO-5 costs more and is available on preferred homes from select carriers. For homeowners with significant personal property or high-value belongings, it is worth considering.

Landlord policies (DP forms)

Rental property uses DP policy forms rather than HO forms:

• DP-1: named perils only. Very limited coverage.
• DP-2: broader named perils. Moderate coverage.
• DP-3: open perils on the dwelling. Standard recommendation for landlords.

For rental properties, DP-3 is the right choice. DP-1 leaves too many gaps.

Cooper's take

Frequently asked questions