What type of perils does a named peril policy cover?

A named peril policy specifically covers losses resulting from perils that are explicitly listed in the policy itself. This means that the insurance agreement outlines exactly which risks are covered, such as fire, theft, vandalism, or specific natural disasters, depending on the policy provisions.

This approach provides clarity to the policyholder, enabling them to understand exactly what events would lead to coverage. If a peril is not named in the policy, it is not covered. Hence, if someone faces a loss due to an unspecified peril, they would typically not receive any benefits from the insurance.

The other options do not accurately describe named peril policies. A policy covering all risks would be classified as an all-risk or open peril policy, not a named peril policy. General exclusions refer to categories of risks that are not covered by any insurance, and mentioning only natural disasters limits the scope of coverage incorrectly, as named peril policies include a variety of specific risks beyond just natural disasters.