What is an Insurance Peril?
Insurance is a contract that promises to cover personal property against damage caused by different destructive events known as perils. Insurance policies are available for different perils, providing different levels of coverage, and for sale at different price points.
Named peril vs. all-peril policies
Insurance policies are defined as one of two levels of coverage. The covered perils can be ‘named perils’ that are specifically defined in the text of the policy, or they may be covered by ‘all-risk’ policies that are written to allow for coverage of any non-excluded peril.
All-risk policies are the most common type used, and are often required by mortgage lenders in cases where a home is still being paid for. If you are required to carry an all-risk, open peril home insurance policy, it’s important to remain aware of any exclusions that may be written into that policy. If you live in an area prone to flooding, wildfires, or severe wind and hail damage, you may need to purchase additional coverage in the form of a named peril policy.
The 16 named perils covered by most HO-3 homeowners policies:
Fire or lightning | Theft |
Volcanic eruption | |
Explosion | Falling objects |
Riot or civil commotion | Weight of ice, snow, or sleet |
Aircraft | Discharge or overflow of water or steam |
Vehicles | Sudden tearing, cracking, or bulging |
Smoke | Freezing |
Vandalism | Accidental damage from electrical current |
How do I pay for insurance? Premiums vs. Deductibles
Once you’ve selected the right level of coverage for your home and personal property, you’ll need to understand how insurance payments work. You’ll pay for insurance coverage in two ways: one that is regularly scheduled, and one that is conditional upon how often you make a claim on the policy.
Insurance premiums are the bills that you pay every month or year to maintain the coverage of the insurance policy. The cost of your premium will be determined by a number of factors, including your location, your insurance risk history, and local hazards that could affect your property.
The home insurance deductible that you pay only if you make a claim is the amount you owe toward the repairs the policy is covering. Once your deductible is covered, the insurance company will release the funds to pay the reset of the repair bill. The amount owed as a deductible will be set in the terms of your insurance policy. Deductibles are generally calculated in one of these ways:
- Flat-rate deductibles are just that: a flat price that you agree to when you buy the policy. Flat-rate home insurance deductibles are often set at $500, $1,000, or $2,000, but can vary with the market.
- Percentage deductibles are calculated as a percentage of the total property value that is being insured. Percentage deductibles of 1-2% of the home value are common across much of the American Midwest, Southeast, and Plains regions where wind and hail storms are more common perils. Higher rates up to 5% are used in some of the highest risk areas in Hail Alley and Tornado Alley.
Besides insurance, how can I protect against perils?
By following recommended building or repair methods and using reinforced building materials like impact-resistant shingles, you can fortify or ‘harden’ your home against common weather perils. These sorts of improvements can provide leverage to negotiate better insurance prices while also providing better protection against severe weather and other threats.
How add-on insurance coverage can help
Without the additional coverage provided by a supplementary policy, homeowners may find the high cost of wind and hail deductibles in their area to be unaffordable, thus preventing them from making a claim even if they experience substantial home damage. With an add-on deductible relief policy that helps cover the high cost of a peril-specific deductible, you can secure a more complete portfolio of coverage for your home and other property without a significant increase to your overall insurance bill.
Sources:
“Facts + Statistics: Homeowners and renters insurance”
https://www.iii.org/article/which-disasters-are-covered-by-homeowners-insurance
“Home insurance policies: All risk or named peril” Texas Dept. of Insurance, Sept. 29, 2025, https://www.tdi.texas.gov/tips/all-risk-or-named-peril-home-insurance-policies.html
Cummins, Brad. “What Are Home Insurance Perils?” InsuranceGeek, Mar. 24, 2026,
https://www.insurancegeek.com/homeowners-insurance/home-insurance-perils/
Gray is the Senior Content Specialist at Sola Insurance, working with the Sales and Marketing teams to provide helpful, valuable content for homeowners and agents. Gray has worked previously in finance, logistics, and advertising.
