Arizona Homeowners Peril Guide

Most individuals are aware that homeowners need to protect their home investment by acquiring insurance for the dwelling. However, many people have a limited understanding of what is covered by such insurance. Within the insurance policy, wording is usually included that lists homeowners named perils. If any of the named perils within the policy occur to the insured's home, the insurance company will pay to cover the damages.

Named Perils in Arizona

Some of the Arizona named perils that are most commonly included in a homeowners policy are theft, lightening, explosions, fire and wind damage. If an insurance policy specifically states that it will only cover named perils, then the insurance company is only responsible for paying out benefits for those particular calamities. For example, if a named peril policy does not list earthquake but it does list fire, the insurance company would not be required to pay for damage caused by an earthquake. But if a fire ensues, the fire damage would be covered. Due to the limited scope of damages covered in this type of policy, the premium is usually less expensive for the homeowner. This is one factor that makes these policies so appealing to homeowners with limited financial resources.

In contrast, a separate type of insurance policy that covers open perils puts the insurance company at a greater risk of having to pay for damages. This risk factor is the reason that open peril policies generally have a higher cost for the homeowner. But it should be noted that such a policy can help bring greater peace of mind to the individual since it extends a broader umbrella to help protect in the event of a loss. The insurance company puts itself at risk to cover a wider range of calamities, while the homeowner frees himself up to shoulder less of the burden in case there should be a loss.

It is highly advisable that each individual homeowner evaluate which type of coverage best suits his or her particular needs. The time to make such decisions is before a peril strikes, not afterwards.