Open Peril (All-Risk)

An open peril policy, sometimes called an all-risk policy, covers all causes of loss except those specifically listed as exclusions in the policy document. Instead of enumerating what is covered, an open peril form defines what is not. This reversal of the burden produces much broader protection than a named peril policy: if the cause of your damage does not appear on the exclusion list, the claim is covered -- even if it is an unusual cause that no one could have anticipated when the policy was written.

The practical difference becomes clear in everyday situations. A named peril form for personal property covers roughly 16 listed causes. An open peril form covers anything not excluded. Under a named peril form, a child accidentally cracking a flat-screen TV with a toy is not a covered cause of loss and the claim is denied. Under an open peril form, the same loss is covered because accidental impact by a household occupant is not in the exclusion list. Heavy furniture tipping over and damaging hardwood floors: denied under named peril, covered under open peril. A laptop accidentally dropped in water: named peril denies it (accidental damage is not listed), open peril covers it.

On a standard homeowners form (HO-3), the dwelling structure already has open peril coverage. The contents section does not -- it operates on named peril. Upgrading to an HO-5 form extends open peril coverage to personal property as well. If you own expensive electronics, musical instruments, hobby equipment, clothing, or high-value household items, the added protection on contents under open peril is particularly valuable. The premium difference between HO-3 and HO-5 is typically $100 to $300 per year, and the coverage difference on a real contents claim can easily exceed $10,000.