Understanding All Risks Coverage in Insurance
All risks coverage is a type of insurance policy that provides automatic coverage for any risk not explicitly excluded in the contract.
In property insurance, an all-risks policy covers property for any event unless expressly stated otherwise.
This type of coverage is typically found in the property-casualty market.
Understanding All Risks Coverage
Insurance companies typically offer two types of property coverage: all risks and named perils.
Named perils insurance only covers the specific events listed in the policy.
Burden of Proof
To trigger coverage under an all-risks policy, there must be proven physical loss or damage to the insured property.
The insured party must provide evidence of physical damage or loss, and the insurer must demonstrate that an exclusion applies to the specific case.
Special Circumstances
Due to its comprehensive nature, all risk insurance tends to have higher premiums than other policies.
Considering the costs of this coverage relative to the likelihood of filing a claim is essential.
Additionally, it is possible to have a combination of named perils and all risks coverage within a single policy.
Therefore, when obtaining insurance, it is crucial to carefully read and understand the policy terms, including what is included and excluded from coverage.