What does "named peril" coverage mean in homeowners insurance?

"Named peril" coverage in homeowners insurance refers to a type of policy that specifically lists the risks or perils that are covered. This means that if a peril is not mentioned in the policy as being covered, then any loss or damage resulting from that peril will not be compensated by the insurance.

For instance, common named perils include fire, theft, and vandalism, but if a homeowners policy under named perils does not specifically list earthquake damage as a covered risk, the homeowner would not be able to file a claim for earthquake-related losses.

This approach contrasts with "all-risk" or "open peril" coverage, which protects against all perils unless they are explicitly excluded. Understanding that named peril coverage is limited to specific risks helps policyholders assess their protection needs carefully and consider whether they might need additional coverage for risks not included in their policy.