Excluded Peril

What Does Excluded Peril Mean?

An excluded peril is a risk or event that is not covered by an insurance policy. If a loss occurs due to one of the excluded perils, the insurance company is not responsible for providing financial compensation.

Insuranceopedia Explains Excluded Peril

Typically, a standard insurance policy covers basic perils but excludes highly costly or uncommon risks. For example, an auto insurance policy may not cover damage caused by animals.

Policyholders can often purchase an endorsement or a separate policy to address the coverage gap created by an excluded peril. For instance, renters in a flood zone may choose to buy flood damage coverage to supplement their renter’s insurance, which excludes this specific peril.