Archive for November, 2013

All Risk vs. Named Peril

When purchasing homeowners insurance in Texas, it is important to fully understand the different types of policies, and the benefits of each. Many times homeowners purchase insurance coverage that does not give them the right amount or the right type of coverage, while others sign up for insurance policies that give them unnecessary coverage.

The two most common types of homeowners insurance include, named peril policies, and all risk policies. An all risk policy is a type of insurance coverage that is typically believed to be the most reliable form of insurance. It is the most comprehensive home insurance option because it usually covers every foreseeable and unforeseeable event possible, except for things specifically outlined in the policy. All risk insurance policies are typically more expensive due to their comprehensive coverage options.

A named peril policy is a type of insurance policy that only gives you insurance coverage against accidents and events that are specifically listed in the policy. The accidents/events listed in the policy are known as “perils”.  This policy does not provide the same all encompassing coverage as an all risk policy, but it is sometimes the most practical option for individuals who don’t need the all perils coverage. Homeowners can specifically identify what they would like to be protected against and not have to pay for coverage that they don’t necessarily need.

Understanding the differences in the types of homeowner’s insurance policies is essential to ensuring that you choose the policy that is best for you. In some cases, it could be beneficial for one homeowner to purchase a certain type of insurance, while it would be completely unreasonable for another homeowner to get the same policy. It is important to understand that each situation is different, and the most important thing is making sure that you and your family’s home is protected in the event of an accident or event.

At the end of the day, you should sit down and thoroughly analyze your insurance options, and make the best decision based on your circumstances. After reviewing your options, a decision should be made based on what is practical and affordable. However, you should keep in mind that while valuing a home can sometimes be simple, it is impossible to put a value on peace of mind.