All-Risk Policy

Example

“The homeowner chose an all-risk policy for her house, which covered damage from a neighbor's tree falling during a storm, even though this specific scenario wasn't explicitly mentioned in the policy.”

Memory Tip

Remember 'All-Risk = All Covered (except what's crossed out)' - it covers everything unless specifically excluded.

Why It Matters

All-risk policies provide much broader protection than named-peril policies, covering unusual or unexpected events that might not be specifically listed elsewhere. This comprehensive approach can prevent costly coverage gaps and provides peace of mind for significant assets like homes or valuable personal property.

Common Misconception

Many people think 'all-risk' means absolutely everything is covered, but these policies still contain exclusions for things like floods, earthquakes, war, or intentional damage. The key difference is that coverage is presumed unless specifically excluded, rather than having to be specifically included.

In Practice

Jennifer has an all-risk homeowner's policy when a sinkhole opens under her driveway, causing $15,000 in damage. Even though sinkholes aren't specifically mentioned in her policy, the damage is covered because it's not listed as an exclusion. However, when flooding from a nearby river causes $25,000 in basement damage, this isn't covered because flood damage is specifically excluded from her policy.

Etymology

Straightforward term from insurance industry meaning coverage for 'all risks' or perils, developed to distinguish from more limited 'named peril' policies that only covered specifically listed dangers.

Common Misspellings

Related Terms

More in insurance

Other insurance terms you should know

See Also