Introduction
Property insurance can feel overwhelming, especially when you're comparing quotes that use different terminology and coverage structures. Understanding the three main types of property coverage — named perils, broad form, and special form — is essential for making informed decisions about protecting your investment.
Named Perils Coverage
Named perils coverage (sometimes called "basic form") only covers losses specifically listed in your policy. Common named perils include:
- Fire and lightning
- Windstorm and hail
- Explosion
- Riot or civil commotion
- Aircraft or vehicle damage
- Smoke damage
- Vandalism
- Sprinkler leakage
The catch: If a peril isn't explicitly named, you're not covered. For example, if your policy doesn't list "water damage" and a pipe bursts, you could be on the hook for the entire repair cost.
Broad Form Coverage
Broad form coverage includes all named perils plus additional protections:
- Falling objects
- Weight of ice, snow, or sleet
- Water damage (from plumbing, heating, or AC systems)
- Collapse from specified causes
- Glass breakage
This is often a good middle-ground option that provides more comprehensive protection without the premium cost of special form coverage.
Special Form Coverage (Recommended)
Special form coverage — also called "all-risk" or "open perils" — takes the opposite approach: it covers all causes of loss except those specifically excluded. Common exclusions include:
- Earthquake
- Flood
- Wear and tear
- Intentional damage
- Government action
Why we recommend it: With special form coverage, you don't have to anticipate every possible disaster. If something unexpected happens and it's not on the exclusion list, you're covered.
Making the Right Choice
For most building owners, we recommend special form coverage. While the premium is higher, the protection is substantially better. The cost difference is often 10-20% more than broad form, but the peace of mind — and potential claim payouts — make it worthwhile.
Key Takeaways
- Named perils = Only covers what's listed (most restrictive)
- Broad form = Named perils + additional coverage (middle ground)
- Special form = Covers everything except exclusions (most comprehensive)
When reviewing quotes, always ask what type of coverage is being offered. A lower premium might mean less protection when you need it most.
Need help understanding your current coverage or getting a quote? Contact us for a free policy review.