Property · Insurance Term
Peril (Cause of Loss)
Definition
A peril is a cause of loss — something that can damage or destroy property, such as fire, wind, hail, lightning, theft or vandalism. Every property policy spells out which perils it covers and which it excludes.
In Plain English
Insurance policies are built around perils. A named perils policy covers only the perils it lists. A Causes of Loss – Special Form policy works the other way: it covers direct physical loss unless the cause is excluded or limited.
Some perils are commonly excluded from standard commercial property policies, such as flood, earthquake, and wear and tear. Others, like windstorm in parts of the Texas coast, may be excluded and insured separately. Knowing your covered perils shows you where the gaps are.
At claim time, the cause matters. Water from a burst pipe and water from a rising bayou can cause the same damage but are treated very differently.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: a strip center has a special form policy. A storm brings hail that cracks skylights and floodwater that enters two units. The hail damage would usually be a covered peril, subject to the deductible. The flood damage would usually be excluded unless separate flood insurance is in place.
Why It Matters for Texas Property Owners
Texas owners face an unusual mix of perils: Hail damage, windstorm, flash flooding, hurricanes on the coast, wildfire in the west, and hard freezes like Winter Storm Uri in February 2021. A policy that looks complete on paper can still exclude or limit the peril most likely to hit your area.
What to Watch For
- Check whether your policy is named perils (basic or broad) or special form.
- Read the exclusions, especially flood, earth movement and wear and tear.
- If you are near the coast, confirm whether wind and hail are covered or excluded.
- Ask how the policy treats a loss with two causes, such as wind and flood together.
Sources
- Texas Department of Insurance — February 2021 winter weather data call summary
- Insurance Information Institute — Facts + Statistics: Hail
Last updated October 14, 2026 · Primesure editorial team · How We Write