All perils car insurance coverage

What does all perils mean?

In insurance, a peril is something that causes loss or damage. Theft, collision, fire, and hail are all examples of perils.

Accordingly, an all perils car insurance policy protects against all of the perils—or at least, most of them.

What all perils means is that the insurance policy protects against every peril for which insurance is available. Some things, like mechanical breakdown, aren’t covered by any car insurance policy, and accordingly aren’t included in all perils coverage. But, all perils coverage is very broad; if you buy it, your vehicle will have protection against virtually any ordinary cause of physical damage or loss.

All perils insurance coverage is essentially comprehensive coverage and collision coverage bundled together.

However, it also adds slightly broader theft protection; all perils covers theft of the insured vehicle by a household member, which standard comprehensive coverage does not. While this sounds niche, it can be a useful coverage—for example, if you live with unrelated roommates that you don’t know particularly well.

All perils coverage is optional in most cases.

If you’re leasing or financing your vehicle, your lessor or lender will require you to keep comprehensive and collision coverage on it. If you opt for all perils instead, they’ll usually consider that box checked. After all, it’s even better than those two coverages combined.

Similarly, comprehensive and collision coverage are mandatory in Saskatchewan and Manitoba, so all perils fits there, too. In fact, Manitoba’s standard car coverage includes all perils coverage by default.

All perils coverage and deductibles

Another slight difference between all perils coverage and other options is the deductible. A deductible is the amount of money the policyholder pays when they make a claim, before the insurance company pays the rest of the claim settlement.

Most car insurance policies have separate deductibles for comprehensive and collision claims. However, if you opt for all perils coverage instead, you’ll have only one. While that simplifies things, it’s a double-edged sword, as comprehensive deductibles are usually lower than what you’d have on your all perils coverage.

In any case, you can choose from a range of deductibles when you buy your policy. So, you’ll be able to find one that strikes the right balance between coverage and cost. Speaking of cost…

All perils coverage costs

The cost of a car insurance policy varies depending on the vehicle, the driver, and the insurance provider. However, all perils coverage is pretty much always more expensive than other coverage options.

After all, it’s the broadest coverage you can buy, so it makes sense to pay a little more. Fortunately, the difference in cost is often manageable because of the higher deductible that comes with it.

If you’re worried about the cost, you may prefer buying collision or comprehensive separately, one without the other. It all depends on which vehicle repairs you can afford to pay out of pocket. With all perils coverage, you’ll have to cover your deductible, but most accidental losses will be covered.

All perils vs. specified perils

If you’re more concerned about cost than protection, you might wish to select instead of all perils.

All perils coverage protects against basically all forms of damage, except those few that the policy specifically excludes. Specified perils, meanwhile, only protects against a short list of perils.

For example, in Ontario, specified perils coverage protects your vehicle from:

• Fire
• Theft or attempted theft
• Lightning
• Windstorm
• Hail or rising water
• Earthquake
• Explosion
• Riot or civil disturbance
• Falling or forced landing of an aircraft or parts of an aircraft
• The stranding, sinking, burning, derailment or collision of any kind of transport in, or upon which, an insured vehicle is being carried on land or water

Most other provinces and providers offer protection for a similar list of perils. However, specified perils isn’t a common choice, as comprehensive coverage is better and usually only slightly more expensive.

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