Peril

What Does Peril Mean?

In the context of insurance, a peril refers to any event or circumstance that exposes an individual to the risk of injury, damage, or loss, which the insurance policy is designed to cover. Depending on the policy, perils may include fire, theft, car accidents, and similar events.

Insuranceopedia Explains Peril

Insurance policies typically specify the perils they cover and exclude. Some perils, such as acts of war or natural disasters, are so destructive and widespread that insurance companies often refuse to cover them. Coverage for these events depends on the policy and the region, so homeowners should read the declarations page to confirm which natural disasters their homeowners insurance actually covers. For example, homeowner’s insurance generally doesn’t cover floods, as this peril can devastate entire regions rapidly, especially if sea levels rise significantly after a hurricane. Homeowners in flood-prone areas typically need to buy a separate flood insurance policy through the National Flood Insurance Program or a private carrier.