What does a "Named Perils" policy provide?

A "Named Perils" policy specifically provides coverage for only those perils that are explicitly listed in the policy. This means that if a property owner experiences damage or loss, the policy will only respond if the cause of that loss is among the named perils. Common examples of named perils include theft, fire, vandalism, and specific weather events.

This type of policy defines the scope of coverage clearly and helps the insured understand what risks are protected. If a peril is not mentioned in the policy, then the insurance would not cover claims resulting from that unlisted cause. This contrasts with an "All-Risk" or "Open Perils" policy, which covers all risks except for those specifically excluded.

The other options do not accurately describe the nature of a Named Perils policy. It does not encompass all possible risks, does not solely cover catastrophic events, nor does it specifically address loss of rental income unless that coverage is separately included. Therefore, the focus on the particularity of the risks covered is what makes the Named Perils policy distinct and important for property owners to understand.