Property claims glossary
What is a peril in insurance?
A peril is a cause of loss, such as wind, hail, fire, lightning, water or theft. Coverage often turns on exactly which peril caused the damage, because the same damage can be covered under one peril and excluded under another.
Worked example · fictitious claim
Two houses on one street each have $18,000 of water damage in the living room. In the first, wind tore off shingles and rain came through the opening, a covered peril, so with a $1,000 deductible the policy pays $18,000 − $1,000 = $17,000. In the second, rising surface water came in under the door, which a homeowners policy excludes as flood, so it pays $0.
How it affects a settlement
The peril decides which coverage, exclusion and deductible apply, so it has to be identified before any figure is calculated. When more than one peril contributes, the policy wording and state law decide how the loss is treated.
In practice
The cause of loss: wind, hail, fire, water, theft. Coverage often turns on the peril's precise identity: wind-driven rain and rising water can produce identical living-room damage with opposite coverage outcomes.
Related
Exclusion · HO-3 policy · Policy coverage checking · property claims glossary