Insured Peril
A specific risk, danger, or cause of loss that is explicitly covered by an insurance policy. When an insured peril occurs and causes damage, the insurance company will pay for covered losses according to the policy terms.
Example
“Fire is an insured peril under most homeowner's policies, so when lightning struck and burned down the garage, the insurance company covered the $45,000 in damages.”
Memory Tip
Think 'Peril with Protection' - these are the specific dangers your policy protects you against, like a shield against certain risks.
Why It Matters
Knowing which perils are insured helps you understand exactly what protection you have and what gaps might exist in your coverage. This knowledge helps you make informed decisions about additional coverage and avoid surprise claim denials that could cost you thousands of dollars.
Common Misconception
Many people assume their insurance covers all possible dangers, but policies only cover specifically listed or broadly defined insured perils. Another misconception is that 'acts of God' are never covered, when many natural disasters are actually insured perils under standard policies.
In Practice
Jennifer's homeowner's policy lists wind, hail, fire, and theft as insured perils but excludes flood and earthquake. When a storm causes $8,000 in wind damage to her roof and $12,000 in flood damage to her basement, her insurance pays for the wind damage minus her $1,000 deductible ($7,000 total) but denies the flood claim entirely because flood is not an insured peril under her policy.
Etymology
Combines 'insured' from Latin 'securus' (secure) and 'peril' from Latin 'periculum' (danger), literally meaning 'dangers made secure' through insurance coverage.
Common Misspellings
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Related Terms
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See Also
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