insurance

All-Risk Policy

An insurance policy that covers all types of losses except those specifically excluded in the policy language. This provides broader protection than named-perils policies, which only cover explicitly listed risks.

Example

“Her all-risk homeowners policy covered the damage from the meteor strike because it wasn't specifically excluded, unlike a named-perils policy that would have denied the unusual claim.”

Memory Tip

Think 'All-Risk = All Good Unless Said No' - everything is covered unless the policy specifically says it's not.

Why It Matters

All-risk policies provide broader protection and reduce the chance of coverage gaps since you don't need to worry about whether a specific peril is listed. This can be especially valuable for protecting against unusual or emerging risks that weren't anticipated when buying insurance.

Common Misconception

The name leads people to believe these policies cover absolutely everything, but all insurance policies have exclusions. All-risk policies still exclude things like war, nuclear hazards, intentional damage, and wear-and-tear - they just cover more perils than named-perils policies.

In Practice

Jennifer has an all-risk policy on her $400,000 home with a $2,000 deductible. When a sinkhole opens under her driveway (not a common named peril), causing $25,000 in damage, her policy covers the loss minus her deductible, paying $23,000. A neighbor with a named-perils policy that didn't specifically list sinkholes received no coverage for the same type of damage, paying the full $25,000 out-of-pocket.

Etymology

The term emerged in marine insurance in the 19th century, where 'all risks' meant coverage for any peril that could befall a ship or cargo, except those specifically excluded. It spread to other insurance lines as comprehensive coverage became more popular.

Common Misspellings

All Risk PolicyAll-Risks PolicyAll Risk PolcyAl-Risk Policy

Related Terms

Comprehensive Coverage

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