Three fundamental types of home insurance policies include:
Named perils: These are the most restrictive policies available; they protect you against only a narrow selection of losses. Typically, this includes fire or lightning, explosion, smoke, falling objects, impact by aircraft or land vehicle, riot, vandalism or malicious acts, some types of water damage<, windstorm or hail, and theft or attempted theft. Named perils policies will only cover loss or damage caused by one of these specified perils. If something else causes the loss or damage, your policy will not assist you.
Comprehensive: These policies protect you against all types of loss except those specifically excluded. Loss or damage due to wear and tear, snowslide or landslide, acts of terrorism, and war are some examples of the types of loss typically excluded in comprehensive policies. Even with the exclusions, comprehensive policies provide you with the best protection; a loss can only be excluded if it specifically appears in the policy wording.
Broad form: These policies fall somewhere in the middle ground, providing comprehensive protection for the home, and named perils protection for personal property. While this may seem like an interesting idea, it’s ineffective in a wide range of potential losses. For example: if you accidentally drop your television, damage to your hardwood floors would be covered, but damage to the TV would not.