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Home Insurance Tips: Named And Open Perils

Home Insurance Tips: Named and Open Perils

Home insurance can cover your home and property from a number of perils, but it’s up to you to understand what’s included in your policy. Check out this insurance advice from a local expert.

Your home may be the biggest investment you ever make, so you naturally want to protect it. Insuring your home will require some strategic planning, so we asked Red Rock Insurance agent John Lipscomb a few common questions:

What is my home protected against?

It’s the homeowner’s responsibility to review their policy to be familiar with what’s covered and excluded. A standard policy (HO3) for the house itself would be an Open Perils policy. In an Open Perils policy, a home should be covered against damage unless the cause is specifically excluded by the policy.

“For example, most HO3 policies specifically state that earthquakes or movement would not be covered,” says Lipscomb. “In this case, the home owner can generally add earthquake coverage to the policy.”

How is my property protected?

Under a standard HO3 policy, personal property and a home’s contents are commonly covered under a Named Peril.

“Named Peril, unlike Open Peril, means the contents are covered for the events specifically named in the policy,” says Lipscomb. “If cause of loss is not listed in the policy, then the contents are not covered if that type of loss occurs.”

Common perils include water drain and sewage back up. “This item must be added for most policies and most agents will advise you to add this valuable coverage,” says Lipscomb.

To recoup as much as possible when property is damaged, Lipscomb recommends adding Replacement Cost Value for home contents. “Without RCV, replacement value of personal property is settled by Actual Cash Value, which is a depreciated value of the personal property.”


If you have any questions about home insurance, you can reach Lipscomb at When you need to finance a home, we’re here to help.

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