James has an insurance policy for his tools that does not cover fire loss. What is this type of peril called?

The correct answer identifies the type of peril as an excluded peril. In the context of insurance, a peril is a specific event that can cause a loss. When a policy explicitly states that it does not cover certain types of perils, such as fire loss in James's case, those perils are categorized as excluded. This means the insurance policy does not provide coverage for losses resulting from that specific event. Thus, any loss related to the excluded peril of fire would not be compensated by the insurer.

The other terms—insured peril, uninsured peril, and excepted peril—do not accurately describe the situation. Insured perils are those that are covered by the policy, losing meaning in this context because fire is specifically excluded. Uninsured peril could misleadingly suggest a lack of coverage altogether instead of focusing on what is specifically excluded. Excepted peril is not commonly used in standard insurance terminology and might not accurately convey the idea of a reduced scope of coverage resulting from exclusions in the policy.