What is All-Risks Coverage?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 18 October 2019
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In the world of insurance coverage, there are different types of policies that provide protection from a variety of different types of natural and other forms of disaster. All-risks coverage is a type of insurance protection that provides coverage in the event of a wide variety of incidents, with just a few specific exceptions. Here is some information on how all-risks insurance works, and why a policy of this type can be a wise investment.

There are many types of insurance policies that cover a wide range of coverage in the event of a multitude of incidents. What sets all-risks coverage apart from most policies is that rather than listing a number of accident types and natural disasters that would be covered under the terms of the policy, the all-risks coverage takes a different approach. The typical all-risks coverage approaches coverage from the perspective of what is not covered under the terms of the policy. Spelled out within the text of the coverage will be specific types of events that would not be subject to successfully submitting a claim and receiving reimbursement.


What this means is that engaging an insurance provider for all-risks coverage provides a wide umbrella of usual and standard protection against the more common incidents that may take place. Generally, all-risks coverage will not include any major weather disaster that has a good chance of occurring in the general location. As an example, if the insured lives in an area that regularly experiences tornadoes during the season, an all-risks coverage plan is likely to not include damage from tornadoes. In other locations, such natural phenomenon as flooding and hurricanes may not be covered under the terms of the policy. If that is the case, that information will be recorded in the text of the policy, in terms that are very clear to understand.

The advantage to all-risks coverage is that the protection is so sweeping in nature that unusual events are covered. There is no need for a great deal of checking and consultation to determine if an odd occurrence is covered or not. Unless the event is specifically addressed as not being covered, then a claim can be filed and paid with no delays.

All-risks coverage is the exact opposite of what is known as named peril coverage. With that sort of coverage, only incidents that are specifically mentioned within the policy are covered. The coverage is very focused, with no room for interpretation. While a named peril policy may be great for obtaining coverage against a small number of incidents, it is generally only taken out as a means of obtaining coverage in the event of something that is likely to be excluded from other types of insurance coverage.

Taking out all-risks coverage can provide a great deal of comfort, due to the broad amount of protection it provides. While some companies have rather high premiums for this sort of insurance protection, it is possible to do some shopping and find rates that will work well within the budget.


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