Against All Risks (AAR)

Against all risks is an insurance policy that provides coverage against all types of loss or damage. Exclusions can still be included in an against all risks policy, but the insured will be covered against any risks that are not specifically named. 

An against all risks insurance policy is the opposite of a named peril policy, which protects against specific losses named in the policy. An example of a named peril policy would be a flood insurance policy, which specifically insures against damages incurred by flood waters.

An against all risks policy provides coverage beyond anything that is specifically excluded from the policy, meaning if there is not a specific exclusion for something like hurricane force winds, the policy will automatically cover any damages sustained by such winds. These types of policies are also known as all-risk insurance.

Insurance policies can have different exclusions and different riders and deductibles, so it is important for a policyholder to verify what their policy covers. If a policyholder needs additional riders or coverages, the policyholder will need to negotiate those coverages with providers.

Insurance is a protection against loss. There are various types ranging from health insurance to commercial property insurance. Each form of insurance provides protection against a different type of loss. With health insurance, a policyholder makes premium payments towards the policy that will cover any expected or unexpected medical costs that may arise. For homeowner’s insurance, a policyholder pays a premium towards any losses that may occur to or on their property.

Almost anything can be insured against loss. Some people choose to insure expensive pieces of jewelry or large and valuable collections. Most pieces of personal property that are insured must first receive a valuation, or appraisal. A valuation allows the insurance company to verify what the fair market value of the item is, which helps the insurance company determine the amount of coverage the item needs. For example, a diamond ring worth $15,000 cannot be insured for more than $15,000. When it comes to large value items, like automobiles and houses, it may make sense for the owners to occasionally have the items reappraised as values can change over time. When considering the value of something that is worth hundreds of thousands of dollars, the fluctuation in fair market value could amount to tens of thousands of dollars.