How does 'named perils' coverage differ from 'open perils' coverage?

The distinction between 'named perils' coverage and 'open perils' coverage is fundamental to understanding how homeowners insurance operates. Named perils coverage specifically enumerates the risks or events that are covered under the policy. This means that only the perils that are explicitly mentioned in the policy document are covered. If a peril is not listed, then it is not covered, leaving the homeowner potentially vulnerable to a range of other risks.

On the other hand, open perils coverage provides a broader level of protection. It covers all risks except those specifically excluded in the policy. This means that if an event occurs that is not listed as an exclusion, the claim can typically be filed and paid out.

This crucial difference highlights why the correct answer identifies that named perils covers only specified risks, whereas open perils covers everything except those exclusions. The clarity of this distinction helps homeowners choose the type of coverage that best suits their needs and risk tolerance.