All Perils vs. Specified Perils: Which is the better coverage for me?

Having car insurance in Canada is mandatory but each province has their own mandatory coverage requirements, which is the base coverage you'd need to have. In addition to mandatory coverage, there are add-on options that you can opt into to further enhance your coverage. With many options available, how do you know which coverage is best for you? Let's start off by breaking down all of your enhanced coverage options and then take a deeper dive into two of them – Specified Perils and All Perils Coverage.

There are four add-on options you can choose from:

• Collision or Upset: Covers loss or damage to your vehicle as a result of an at-fault accident (e.g., collision with another vehicle or objects like guardrails, trees, etc., and vehicle upset such as rolling, flipping over).
• Specified Perils: Covers loss or damage to your vehicle as a result of specific hazards outlined in your policy.
• Comprehensive: Covers loss or damage to your vehicle as a result of any Specified Peril, vandalism, collision with an animal and certain types of glass breakage but does not include Collision and Upset-related incidents.
• All Perils: Covers loss or damage to your vehicle as a result of Collision or Upset-related incidents and Comprehensive-related incidents.

Of these four options, you'll notice that Specified Perils and All Perils have the common insurance term 'peril' in their name. So, what exactly is a 'peril'? You can think of 'peril' as being a type of hazard. Although all four coverage options cover hazards to some degree, it's the type of hazards covered that make them differ. Let's further explore Specified Perils and All Perils coverage so you can get a better understanding on which option may work best for you.

Specified Perils Coverage is optional coverage that protects your vehicle from a list of 10 perils/hazards that are outlined in your policy.¹ Between this coverage option and All Perils, Specified Perils is more limited and typically covers your vehicle for:

• Fire
• Theft/attempted theft
• Lightning
• Hail
• Rising water

It's important to note that Specified Perils does not cover any Collision or Upset-related incidents and does not offer coverage for vandalism or certain types of glass breakage.

All Perils Coverage is another form of optional coverage that offers a combination of Collision or Upset and Comprehensive coverage. You can think of All Perils as an all-inclusive coverage option for your vehicle that shares one common deductible. If your car was damaged due to a hazard like hail or fire, or you've been a victim of car theft, your car would be covered for any damage or loss. The same would apply in the event of a road accident, your car's repair costs would be covered, too.

The main difference is the extent of coverage they both offer. Like the name suggests, Specified Perils will only cover a specific list of hazards (as outlined in your policy), and does not include Collision-related damages, vandalism and glass breakage from a non-covered peril. On the other hand, since All Perils is the broadest form of coverage, it’ll cover everything on that same list of hazards plus more (like vandalism, as an example). And, it can also cover loss or damage resulting from a collision or hit and run. Be sure to check for some possible exclusions that may be listed on your insurance contract, regardless of which coverage option you choose. For example, a typical exclusion can include no coverage if the insured vehicle is used as a taxi, bus, etc. to carry passengers.

This will ultimately come down to your personal circumstances and how much coverage you're looking for. If you're someone who requires full coverage, including collision-related damages, and you're comfortable with having a common deductible for Collision and Comprehensive, All Perils may be worth considering. If you're someone who wouldn't benefit from Collision coverage and you're comfortable with having less coverage in exchange for savings on your premium, adding Specified Perils or Comprehensive to your car insurance may be the better choice.

If you’re already a TD Insurance customer and you're looking to review your coverage options, you can log in to MyInsurance to manage your policy at any time. If, on the other hand, you're a new driver looking for a car insurance policy or you want to make the switch to TD Insurance, simply get a quote to get started.

Sources:

¹ http://www.ibc.ca/sk/auto/buying-auto-insurance/types-of-coverage