Which of the following best describes named peril coverage?

Named peril coverage specifically refers to an insurance policy that explicitly lists and provides coverage for certain perils or risks, such as fire, theft, or vandalism. If a peril is not mentioned in the list, it is not covered by the policy. This approach allows policyholders to know exactly which risks they are protected against, thereby providing clarity on what is included in their coverage.

This description contrasts with other types of coverage, such as all-risk policies, which cover all risks unless specifically excluded. The focus of named peril coverage is its specificity; it does not provide protection for any risks that fall outside the defined list. Understanding this distinct characteristic is crucial for both policyholders and agents, as it impacts how individuals assess risks and determine the necessary coverage for their insurance needs.