Unspecified All Risks Means
Basic Definition
"Unspecified All Risks" refers to a comprehensive type of insurance coverage that protects against all perils except those specifically excluded in the policy. Unlike "named perils" coverage that only protects against listed dangers, all risks coverage provides broader protection by default, covering any cause of loss that is not explicitly excluded. This approach reverses the burden of proof; rather than the policyholder needing to prove a listed peril caused the damage, the insurer must demonstrate that an exclusion applies to deny a claim. This comprehensive approach provides substantially greater protection for policyholders facing unexpected or unusual loss scenarios.
Typical Exclusions
Despite its broad nature, unspecified coverage of all risks contains standard exclusions. Most policies exclude damage from wear and tear, inherent defects, mechanical breakdown, and gradual deterioration. Natural events like floods and earthquakes typically remain excluded, requiring separate specialized coverage. War, nuclear incidents, and intentional damage by the policyholder are universally excluded. These exclusions vary by insurer and policy type, so a careful review of exclusion language is essential for understanding the actual coverage scope.
Common Applications
Unspecified all risk coverage appears in several insurance contexts. Property insurance protects buildings and contents against the broadest possible damage causes. For valuable possessions like jewelry, artwork, or collectibles, specialized personal property floaters often use unspecified all-risk language to provide comprehensive protection, including mysterious disappearances. Commercial policies frequently offer unspecified all risks options for businesses with complex asset portfolios needing protection beyond standard named perils coverage.
Valuation Considerations
The valuation method used with unspecified all risks coverage significantly affects claim settlements. Replacement cost valuation provides funds to replace damaged items with new equivalents without deduction for depreciation. Actual cash value applies depreciation based on item age and condition, potentially resulting in lower claim payments. Agreed value establishes a predetermined settlement amount regardless of actual replacement cost or depreciation, providing certainty for unique or irreplaceable items.
Premium Implications
Unspecified all risks coverage typically commands higher premiums than named perils alternatives due to its broader protection scope. However, the premium difference often represents excellent value considering the significantly expanded coverage. For high-value or specialized items, the peace of mind and comprehensive protection often justify the additional cost, particularly when considering the challenges of proving specific causes for unusual or complex loss scenarios.