It is important to understand that you are covered only if the loss is caused by a peril that your policy covers.
Peril is an insurance term for a specific risk or cause of a loss. Some policies (all risk policies) cover all perils except ones specifically excluded.
On the other end of the spectrum are policies that cover only the perils named in the policy (named perils policies).
For example, if your home is damaged by an earthquake and your policy doesn’t cover earthquake perils, then your policy won’t pay for the loss of use of your home. A total of 17 perils are defined and used by the insurance industry when writing policies.
In standard Broad Form or Special Form Policies which are the most popular of all homeowners forms, your property is insured against a loss from a majority of the typical perils. The perils commonly excluded are flood and earthquake. Broad Form will typically exclude coverage for acts of war, nuclear accidents and other perils named in the policy.
Since all insurance policies are contractual obligations between the insurer and you, the insured, it is important to understand the obligations of each party. The insurer’s obligation is to provide the specified insurance coverage for the policy period.
The insured’s obligation has two parts: the obligation to pay the policy premium and the obligation to comply with the policy conditions. It is this second part of the insured’s responsibility where issues can arise and result in denial of a claim.
There are several important exclusions regarding the coverages provided for the property damage to dwelling and attached or detached structures. These exclusions are the key to analyzing the perils insured against since direct physical loss to property is covered unless specifically excluded. These are just a few of the typical exclusions that would be common to primary residences and vacation homes.