Open Perils

Open perils is coverage for damages to your property - if something’s not explicitly excluded, it’s covered.

Team LemonadeTeam Lemonade

Open perils is coverage for losses or damages to your stuff, and in the case of homeowners, your house – if something’s not specifically excluded, it’s covered.

What are open perils in insurance?

Let’s start from square one. A “peril” is something that’s covered under your insurance policy. As opposed to a hazard – something that makes the occurrence of a peril or loss more likely – a peril is something that causes, or can cause a loss.

For example, theft is a common peril – that means if your phone is stolen at a coffeeshop, your insurance will reimburse you for that (minus your deductible, of course).

“Open perils,” sometimes referred to as “all perils,” is a specific type of insurance coverage. It means that your insurance company will cover you for anything that happens to your stuff, unless it’s specifically excluded from your policy.

So if an apartment flood ruined your computer, and your policy doesn’t specifically say flooding isn’t covered, your insurance company will have to approve your claim, by default.

Named perils vs. open perils

These two often get confused and misused in insurance.

Named perils refer to a list of 16 bad things that may happen to your personal property that’d be covered by your insurer.

Open, or all perils, can refer to your personal property or home (dwelling, in insurance lingo) and only specify stuff that isn’t covered.

While most renters policies have coverage on the basis of named perils, most homeowners policies have a mix of both.

On HO3 policies (basic homeowners policies) it’s very common to see open perils coverage for your house and named perils coverage for the stuff you own. On HO5 policies (premium homeowners policies) you’ll see open perils coverage for both.

Just to note, most insurers will give you the ability to opt for coverage on the basis of open perils at an additional expense – more on that in the next section.

Should you get an open perils policy?

Whether you have an “open perils” or “named perils” policy depends on the type of insurance policy you purchase.

If you get an HO5 homeowners policy, which is basically the Rolls Royce of insurance policies, “open perils” is included on both property and dwelling coverage. As we mentioned before, if you get a more basic HO3 policy, you’ll be covered under “named perils” only.

So which policy should you get?

Well, it depends on your situation. Naturally, since ‘open perils’ policies provide more comprehensive coverage, you’ll have to pay the price for that extra piece of mind. It’s all about tradeoffs.

If you have a new home with a high value in a low-risk area, we suggest asking your insurer about an HO5 policy. It may have a price comparable to an HO3 policy. Otherwise, your basic HO3 policy should do the trick.

Pro tip: Don’t forget to double check the limits of liability in regard to “named perils” versus “open perils,” so you can understand exactly what you’re getting coverage for.

A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of the policies issued, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states. Please note that statements about coverages, policy management, claims processes, Giveback, and customer support apply to policies underwritten by Lemonade Insurance Company or Metromile Insurance Company, a Lemonade company, sold by Lemonade Insurance Agency, LLC.  The statements do not apply to policies underwritten by other carriers.

Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.