What is All-Risks Coverage?
In the world of insurance coverage, there are different types of policies that provide protection from a variety of different types of natural and other forms of disaster. All-risks coverage is a type of insurance protection that provides coverage in the event of a wide variety of incidents, with just a few specific exceptions. Here is some information on how all-risks insurance works, and why a policy of this type can be a wise investment. There are many types of insurance policies that cover a wide range of coverage in the event of a multitude of incidents. What sets all-risks coverage apart from most policies is that rather than listing a number of accident types and natural disasters that would be covered under the terms of the policy, the all-risks coverage takes a different approach. The typical all-risks coverage approaches coverage from the perspective of what is not covered under the terms of the policy. Spelled out within the text of the coverage will be specific types of eve
“All Risks” is really an old insurance term originally used on Property Insurance policies. The Coalinga, CA earthquake of 2003 or 2004 brought a series of court cases that ruled in favor of property owners. The basic theory was that the “All Risks of Physical Loss” terminology was confusing to people even though the policy exclusions clearly spelled out what was indeed excluded. For example, Earthquake and Flood are two primary exclusions. In the Coalinga case, even though property owners knowingly refused Earthquake coverage, and didn’t pay Earthquake premiums, the courts ruled that their policies were ambiquous and ruled in their favor citing the “collapse” peril as a “trigger” for Earthquake coverage. To make a long story short, insurance companies were forced to pay almost $1B in EQ claims even though they didn’t collect one dime in EQ premiums for those particular claims. So, over the years the policy forms were changed, and the “All Risks” language was removed from most policies
