Specified Perils Coverage: What It Is and How It Works
What is specified perils coverage?
Specified perils coverage is an optional type of car insurance that covers only named perils such as fire, theft, and severe weather. The causes of loss covered by specified perils coverage vary by insurer, but usually exclude vandalism, glass breakage, and damage caused by hitting an animal.
Specified perils is the most limited form of physical damage protection available in Canada and is mainly appropriate for drivers willing to take on extra risk in exchange for a lower premium.
You can think of specified perils coverage as a more limited form of comprehensive coverage with protection against a shorter list of non-collision perils.
What does specified perils coverage cover?
Specified perils coverage only covers the named perils listed in your policy. This list is not standardized in Canada, so every insurance company’s specified perils product may cover a slightly different list of perils.
Always check the details of your insurance contract or offer to confirm which perils are covered by specified perils coverage, as the list may vary from insurer to insurer.
What isn’t covered by specified perils coverage?
Specified perils coverage does not cover any peril not explicitly listed in your policy documents.
The following causes of loss are always excluded from specified perils coverage:
- Collision damage: Damage from a collision can only be covered by collision or upset coverage.
- Theft by a household member or employee: This type of theft claim is only covered by all perils coverage.
- Medical bills: Accident benefits and uninsured automobile coverage, not physical damage coverage, will cover your medical costs after an accident.
The best way to understand specified perils exclusions is to work with a licensed insurance broker to compare specified perils and comprehensive or all risks coverage. An advisor can request quotes for all levels of coverage and walk you through what’s covered and what’s excluded at each price point.
Specified perils vs. comprehensive coverage
Specified perils is best understood as a limited version of comprehensive coverage that covers a shorter list of non-collision perils excluded from collision coverage.
= Typically covered
= May not be covered
Because specified perils insurance covers a shorter list of perils, it costs less than comprehensive coverage. On average, specified perils coverage adds $15–$25/month to auto insurance premiums, while comprehensive coverage costs $25–$40/month.
Specified perils vs. all perils coverage
Specified perils insurance is the lowest level of physical damage protection available for personal auto insurance policies in Canada, while all perils coverage is the highest level of coverage.
Specified perils coverage only covers a set list of non-collision perils such as fire and theft, excluding others such as animal damage that are normally covered by comprehensive coverage. All perils coverage, on the other hand, combines collision and comprehensive insurance with additional theft protection for the most robust coverage for your insured vehicle.
Is specified perils coverage right for you?
Specified perils typically isn’t the best option for most drivers, since other options offer superior coverage for a similar price.
All perils or comprehensive coverage is usually a better option for drivers who need physical damage protection for their vehicle. Both options provide more complete coverage for common events like glass breakage or hitting an animal. If you’re already paying for limited physical damage protection, it’s usually worth adding $10–$15 to your monthly premium in exchange for upgraded coverage.
However, specified perils coverage may be the right option if:
- You’re willing to pay out of pocket for some repairs, such as damage from hitting an animal
- You aren’t required to carry full comprehensive and collision coverage by your auto loan or lease contract
- You’re on a tight budget but want more than the minimum mandatory coverage
How to compare insurance coverage options
To compare specified perils coverage options, you’ll likely need to work with a licensed auto insurance broker. Most insurance companies in Canada don’t list specified perils coverage as an option for self-directed online quotes.
Request quotes from at least 3–5 different insurers when comparing specified perils coverage options. Ask your broker:
- Which policy lists the most named perils? The fewest?
- Would comprehensive coverage be a better option for me?
- What should my deductible for specified perils be?
When requesting car insurance quotes with specified perils coverage, be sure to set the same deductibles for every quote to get an accurate price comparison. Your broker can help you adjust your deductible to best fit your financial situation and risk tolerance.
FAQ: Specified perils coverage
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.