In insurance, a Peril refers to a specific event or cause that may result in a loss or damage to the insured property or individual. It is a particular risk that the insurance policy is designed to cover. Insurance policies typically list the Perils that are covered and those that are excluded.
What is a Peril in insurance?
When you purchase an insurance policy, you transfer the financial risk of specific Perils to the insurance company. If a claim arises, the insurance company will compensate you according to the terms and conditions of the policy.
It’s essential to read and understand the policy documents to know which Perils the insurance covers and which ones are excluded. Insurance companies may cover different Perils, so choosing coverage that aligns with your needs and risks is crucial.
Examples of Perils
For example, in property insurance, common perils include fire, theft, vandalism, natural disasters like earthquakes or hurricanes, water damage from burst pipes, etc. In health insurance, perils could include illness, accidents, or specific medical conditions.
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