What do "named perils" refer to in an auto insurance policy?

"Named perils" refers to specific risks or events that are explicitly outlined and covered in an auto insurance policy. When a policy employs the named perils approach, it only provides coverage for those particular risks that are named in the policy documents. This means that if the event causing damage or loss is not explicitly mentioned as a covered peril, the insurer will not provide compensation for it.

This concept contrasts with broad or open-peril coverage, which covers all risks except those specifically excluded. Understanding named perils is essential for policyholders because it allows them to recognize precisely what types of incidents they are financially safeguarded against under their insurance policy.