Rhode Island Insurance Adjuster Exam

Which type of insurance policy generally provides more coverage to the insured?

1. Named Perils Policy

2. Open Perils Policy

3. Basic Form Policy

4. Broad Form Policy

The correct answer is: Open Perils Policy

An open perils policy offers broader coverage as it protects against all risks except those specifically excluded in the policy. This means that unless a peril is explicitly mentioned as not covered, it is included. This type of policy is designed to provide the maximum level of protection to the insured by covering a wide range of potential loss events. In contrast, a named perils policy only covers those specific perils listed in the policy, which limits the coverage significantly since it only addresses certain risks. Basic form and broad form policies also tend to offer either limited or intermediate levels of coverage focused on specific risks or categories, rather than the comprehensive approach provided by an open perils policy. This distinction highlights why an open perils policy generally delivers more extensive coverage compared to the others.