Specified perils car insurance coverage

What does specified perils cover?

Specified perils, also commonly known as named perils, is a form of insurance that covers damage or loss arising from a specific list of perils. In insurance, a peril is an event that causes loss or damage, like a collision or a hailstorm.

When it comes to car insurance, specified perils covers damage to the insured vehicle. The coverage will pay to repair the vehicle if it suffers damage, but only damage that results from one of the perils the policy specifies.

The perils in question vary depending on your insurance provider and your province. For example, specified perils coverage in Ontario covers damage from these sources:

• 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

Ontario’s list is fairly standard; most specified perils vehicle policies across Canada feature a similar list.

Specified perils coverage is optional. It’s not a common coverage to choose, simply because there are better options available. In some cases, specified perils isn’t even an option — it’s not broad enough to meet certain mandatory standards.

For example, all drivers insuring their vehicles in Manitoba and Saskatchewan must have collision and comprehensive coverage. Every driver in every province must also keep these two coverages if they’re leasing or financing their vehicle — specified perils usually isn’t enough.

Let’s look at the difference between these coverage options, and why comprehensive is usually the mandatory one.

Comparing specified perils, comprehensive, and all perils coverage

Other car insurance coverages that are closely related to specified perils include comprehensive coverage and all perils coverage. They all insure the vehicle against physical damage and loss, but they vary in the perils that they cover. However, you’ll never buy more than two of the three, given that some of them would overlap.

Specified perils is the most restrictive coverage. It will only respond to losses caused by one of the perils on the list.

Comprehensive coverage is much broader. It will cover any damage to the vehicle, except for a few specific exclusions listed on the policy (most notably collisions, which have their own dedicated coverage you can buy separately). There are a few important perils that specified perils policies normally won’t cover, like vandalism, collision with wild animals, or damage to the windshield. These are typically covered under comprehensive coverage. For only a few dollars more per year than specified perils, comprehensive coverage is the best choice for the majority of car insurance customers.

All perils coverage, meanwhile, is the broadest coverage available for physical damage to the insured vehicle. All perils is a combination of comprehensive and collision coverage.

Aside from the difference in coverage between these options, there’s also a difference in price. All perils is the most expensive, because it’s the best coverage — in fact, it’s two coverages in one. Specified perils is the least expensive of the three, but the cost savings are often relatively small compared to comprehensive; comprehensive coverage is the more popular choice between the two.

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