What are the two primary classifications of property insurance?

The classification of property insurance into named perils and all-risk insurance is foundational within the field. Named perils insurance covers only those specific risks that are explicitly listed in the policy. This means if a peril is not mentioned, it is not covered. Examples might include fire, theft, or vandalism. Conversely, all-risk insurance (often referred to as open peril insurance) provides broader coverage, protecting against all risks unless they are specifically excluded by the policy. This distinction allows policyholders to choose the level of coverage that best meets their needs based on their risk tolerance and the nature of the insured property.

Understanding this classification is essential for adjusters as it informs how claims are assessed and what coverage a policyholder can rely on in the event of a loss. The other classifications mentioned in the options serve different purposes and are not foundational to property insurance itself. For instance, short-term and long-term insurance generally refer to the duration of the policy rather than the types of risks covered, while comprehensive and basic insurance typically relate to the extent of coverage but do not specifically delineate the nature of covered perils. Insured and uninsured property coverage centers around the presence or absence of coverage, not the types of perils involved.