Ace the OTL Challenge 2026 – Unlock Your Insurance Success Story!

All-risk coverage in property insurance is designed to provide a broad level of protection by covering all perils unless explicitly excluded in the policy. This means that unless a specific type of loss or occurrence is named as an exclusion in the policy documents, such risks are generally covered.

For instance, if a disaster such as a fire or a burst pipe occurs, and those perils are not mentioned in the list of exclusions, the policyholder would benefit from the coverage. This type of policy is advantageous for protecting against a wide variety of risks, offering peace of mind that many unforeseen events are covered.

The incorrect options highlight more limited forms of coverage. For example, protection against only natural disasters would miss many potential risks, while coverage for selective risks implies a narrower scope limited by the insurer's discretion. Similarly, coverage limited to theft and vandalism would omit many other types of property damage that could occur. Thus, the definition of "all-risk coverage" focuses on comprehensive protection against a multitude of risks, affirming why the answer regarding coverage for all perils, except those specifically excluded, is correct.