Guides
Named perils vs open perils coverage
Named perils pay only for causes your policy lists; open perils pay for any direct physical loss not excluded. Where each applies on HO-3, HO-5, HO-4 and HO-6.
A named perils policy covers only the causes of loss it lists. An open perils policy, which the industry calls a "special form" and many people call "all-risk," covers direct physical loss from any cause unless the policy excludes it. The standard HO-3 uses open perils for your house and other structures and named perils for your belongings, so the same event can be covered on the building and not on the contents.
Two ways to draw the same line
With named perils coverage, the policy hands you a list. If fire, windstorm, theft or another listed peril caused the damage, you are covered, subject to that peril's fine print. If the cause is not on the list, there is no coverage, however sudden or unfair the loss feels.
With open perils coverage, the starting point flips. The policy insures against "direct physical loss" and then subtracts a list of exclusion items. Anything physical and unexpected that is not excluded is covered. The Maine Bureau of Insurance's consumer page on covered perils describes the special form the same way: all perils except those the policy specifically excludes.
The difference shows up in a dispute. In most states, a policyholder under an open perils form shows that a covered kind of loss occurred, and the insurer must point to the exclusion it relies on. Under a named perils form, the policyholder generally has to show that a listed peril caused the loss. Burden-of-proof rules vary by state, so treat that as the usual pattern rather than a promise.
Which forms use which approach
The table follows the ISO standard forms (HO 00 03 05 11 and its siblings). Your insurer's own form and your state's amendatory endorsements control, as ISO homeowners forms and why your policy may differ explains.
| Form | House and other structures | Belongings |
|---|---|---|
| HO-2 (broad form) | Named perils | Named perils |
| HO-3 (special form) | Open perils | Named perils |
| HO-4 (renters) | Not covered by this form | Named perils |
| HO-5 (comprehensive form) | Open perils | Open perils |
| HO-6 (condo unit owners) | Named perils (the unit's fixtures and finishes) | Named perils |
| HO-8 (older homes) | Named perils | Named perils |
The HO-3, HO-4 and HO-6 rows track the May 2011 ISO editions, such as the HO-3 hosted by the Maine Bureau of Insurance. The HO-3 is the most common owner-occupied form; the HO-5 is the version that carries open perils all the way through.
The named perils on your belongings
Coverage C under the HO-3 lists 16 perils: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; falling objects; weight of ice, snow or sleet; accidental discharge or overflow of water or steam; sudden and accidental tearing apart, cracking, burning or bulging of a steam or hot water heating system, air conditioning or sprinkler system, or water heater; freezing; sudden and accidental damage from artificially generated electrical current; and volcanic eruption.
The list reads broad. The conditions attached to each peril are where claims narrow:
- Windstorm or hail. Rain damage to contents inside the house is covered only if wind or hail first makes an opening in the roof or a wall.
- Falling objects. Contents inside a building are covered only if the falling object first damages the roof or an outside wall. A branch that enters through an already open window does not qualify.
- Accidental discharge or overflow of water. The peril covers plumbing, heating, air conditioning and sprinkler systems and household appliances. It does not include a sump or sump pump, and it excludes water that originates off your premises.
- Artificially generated electrical current. The peril excludes tubes, transistors, electronic components and circuitry in appliances, computers and home entertainment units. A surge that burns out a television's circuitry may fall outside the peril, even though a lightning strike is covered under a different peril. See lightning and power surge damage.
Accidental breakage is not on the list at all. A dropped television, a toppled china cabinet and a laptop knocked off a table are not named perils.
What "open" still leaves out
An open perils form is only as open as its exclusion list. On the house and other structures, the HO-3 lists, among other things:
- Wear and maintenance: wear and tear, deterioration, mechanical breakdown, latent defect, rust and corrosion, dry rot, settling and cracking of foundations and pavements, birds, rodents and insects, and animals you own or keep
- Mold, fungus and wet rot, with a narrow exception for hidden damage that follows a covered water discharge
- Freezing, unless you used reasonable care to heat the building or drain the system
- Vandalism when the home has been vacant more than 60 consecutive days
- Water and ground movement: flood and surface water, sewer and drain backup, groundwater, earthquake, landslide and sinkhole
- Faulty work: faulty or defective planning, design, workmanship, materials or maintenance, though ensuing loss that is not otherwise excluded is covered
The water and earth movement exclusions carry a lead-in that matters: they apply "regardless of any other cause or event contributing concurrently or in any sequence." That is an anti-concurrent causation clause clause, and it is why mixed-cause storm claims turn contentious. See anti-concurrent causation clauses explained and the earth movement exclusion explained.
One event, two answers (hypothetical)
Say these happen to a house insured on a standard HO-3. The outcomes follow the ISO wording and could differ under your own form.
| Event | House (open perils) | Belongings (named perils) |
|---|---|---|
| A washing machine hose bursts and soaks the floor and furniture | Covered; the burst hose itself is not | Covered under accidental discharge |
| A drain backs up through the basement floor drain | Excluded as water backup | Excluded as water backup |
| A mover drops a dresser and cracks the tile floor and the television | Tile damage is covered unless excluded | The television is not a named peril, so not covered |
| A tree limb punches through the roof and rain soaks a bedroom | Covered, including the resulting rain damage | Covered under falling objects, because the limb damaged the roof first |
| A utility surge burns out the circuitry in a television | No building damage | Likely outside the electrical current peril, which excludes circuitry |
Sewer and drain backup is the standard example of a gap that an endorsement fills; see water backup and sewer backup coverage.
Why the distinction matters in a claim
An open perils denial must rest on a specific exclusion. The NAIC's model claims regulation (#902, §7A) calls for a written denial that cites the policy provision, condition or exclusion the insurer relies on (NAIC), and many states adopt similar language. Under named perils, the question is whether the insurer's investigation shows a listed peril caused the damage. In both cases, ask for the exact provision in writing before you accept a denial.
Choosing between them
The upgrade from HO-3 to HO-5 buys open perils on belongings, and often replacement cost on them as well. NAIC's report on 2023 data (published July 2026) puts the countrywide average premium at $1,737 for HO-3 and $1,891 for HO-5, a $154 gap, but those averages describe different homes, so they are not a price quote for the upgrade. Many insurers also sell an endorsement that adds open perils to an HO-3's contents. Condo and renter forms use named perils for contents, and some insurers offer open-perils options there too. Your agent can quote the difference for your house.
How to check your own policy
- Find the form number on your declarations page and confirm which edition you hold.
- Read the "Perils Insured Against" section for each coverage letter and note which are named and which are open.
- Read each exclusion list, including the lead-in sentences, since they control how mixed causes are handled.
- Read your endorsements. A windstorm, cosmetic damage or roof schedule endorsement can narrow an open perils form.
- Ask your agent two questions in writing: does my personal property cover accidental breakage, and how are power surges treated?
Key takeaways
- Named perils cover only causes the policy lists; open perils cover any direct physical loss that the policy does not exclude.
- On the standard HO-3, the house is open perils and the belongings are named perils; the HO-5 makes both open.
- Open perils is not unlimited: flood, sewer backup, earth movement, wear and tear and faulty work are excluded.
- Accidental breakage and some surge damage to electronics fall outside the HO-3's named perils.
- Ask for the specific policy provision behind any denial, and check endorsements that change how perils are handled.