Virginia Property and Casualty Practice Exam

A 'named peril' in an insurance policy refers to a risk that is specifically listed as covered within that particular policy. This means that if a loss occurs due to one of the perils explicitly mentioned in the policy, the insurer is obligated to provide coverage for that loss. For example, a homeowner's insurance policy may cover perils like fire, theft, and vandalism, and these would be considered named perils.

In contrast, risks that are excluded from coverage are not covered at all, which does not align with the definition of named perils. Additionally, a risk that might result in a lapse of coverage doesn't relate to what is specifically covered; rather, it indicates conditions under which coverage may not be valid. Finally, a risk associated only with specific policies does not accurately capture the essence of named perils, as named perils can appear across various types of insurance policies. Thus, defining a named peril as a risk specifically covered by the policy captures its fundamental character accurately.