What does a named peril policy specify?

A named peril policy specifies a list of specific perils covered under the insurance contract. This means that the policy only provides coverage for the risks that are explicitly mentioned in the policy documentation. Common examples of named perils include fire, theft, and vandalism. If a peril is not on the list, then the policy does not provide coverage for that risk. This type of policy is beneficial for individuals or businesses that want to have clarity and control over what is included in their coverage, as it helps them understand exactly what risks they are protected against. By knowing the specific risks covered, policyholders can make informed decisions about their insurance needs and additional coverage options if necessary.