Are There Different Kinds of Homeowners Insurance Policies?
Home insurance policies can be separated into “named perils” policies and “open perils” policies.
Named perils only provide coverage for the risks specifically mentioned within their paperwork. The list of perils may be basic and include just a few potential risks, or it may be robust and cover dozens of possible incidents. Even the broadest named perils policies, however, only cover the risks that are mentioned.
Open perils policies typically cover all potential risks that aren’t explicitly excluded in the policy’s paperwork. Most open perils policies only have a few exclusions, such as for earthquakes, floods, wars, and nuclear incidents. Because anything that’s not mentioned as an exclusion is usually covered, these policies usually provide more comprehensive coverage than named perils policies.
Who Should Have Homeowners Insurance?
Almost all homeowners in Massachusetts should have homeowners insurance. Homeowners who have a mortgage on their house are usually required by their mortgage holder to maintain insurance coverage for their home. Even homeowners who don’t have a mortgage, however, still should have an insurance policy.
After all, few homeowners could afford to build or buy a different house with cash if theirs was damaged or destroyed. Homeowners policies can help homeowners financially recover from covered claims.