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Updated
Specified perils is an optional car insurance coverage that you can buy at extra cost and add to your base policy. It augments your policy to protect against perils not covered by a standard insurance policy.
With specified perils, you get coverage against many of the perils included in premium products at a lower price. Rather than having coverage that protects against a broad suite of possible dangers, you're covered for ones that concern you the most.
Specified perils also costs less than comprehensive, collision, or all perils insurance.
Perils are unexpected and accidental events that cause a loss, an insurance term for something that damages your car or renders it undriveable.
Events that specified perils insurance covers usually include:
Since specified perils is optional, some insurance companies might leave some of the perils mentioned off their coverage list.
However, no matter where you go, specified perils won't cover vandalism or damage from falling or flying objects.
A specified peril only involves damage caused by something other than a collision with another vehicle.
For collision protection, you can rely on direct compensation property damage (part of standard insurance in most provinces, and only for when you're not at fault) or collision insurance (another optional insurance product designed to be called upon when you're at fault for a collision).
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Occasionally referred to as ‘all-risk’ insurance, all perils insurance combines the coverage from two optional insurance products: collision and comprehensive insurance.
The collision insurance part of an all-risk policy pays to replace or repair your car when you damage it in a collision with another vehicle. Collision will also pay for single-vehicle accidents and hit-and-runs.
The comprehensive insurance part pays to repair or replace your car when something other than a car collision damages it. For example, a run-in with an animal, hail, water, falling or flying objects, fire, glass, vandalism, and theft (including attempted theft), to name a few.
Named/specified perils include risks that are normally covered by comprehensive insurance except vandalism or damage from falling or flying objects.
Buying specified perils is usually cheaper than purchasing comprehensive insurance since you’re covered against a more limited list of perils.
To sum it up, comprehensive insurance covers you against several potential loss scenarios that don’t involve another car. These perils mainly include weather-related damage, theft, fire and broken glass.
Many drivers choose named perils over comprehensive insurance to save money.
The sample quotes below show how much adding optional coverage types contributes to the total premium. Collision is the most expensive optional product, while specified perils is the least expensive.
| Insurer A | Insurer B | Insurer C | |
|---|---|---|---|
| Annual premium | $1,617 | $2,080 | $3,351 |
| Collision | $190 (11.75%) | $215 (10.33%) | $253 (7.5%) |
| Comprehensive | $40 (2.5%) | $55 (2.6%) | $36 (1.07%) |
| Specified perils | $14 (0.9%) | $33 (1.6%) | $19 (0.6%) |
Have more questions about specified perils? We'll answer some of them here.
Specified perils and named perils refer to the same insurance product. Go ahead and use either term interchangeably. An insurance professional will know what you mean.
The Insurance Bureau of Canada (IBC) refers to a peril as an unexpected, unintended event that causes damage or loss.
There are some perils that car insurance will and won't cover.
Some examples of perils or risks that are covered include:
Examples of perils that are uninsurable:
The above aren't covered by insurance since they are highly likely to occur. Because of that, insurance companies don't want to be accountable for paying for them.
A foundational concept in insurance is physical and moral hazards. First, let’s define the difference between a peril and a hazard:
A physical hazard is something that can cause a peril. For example, parking your car on the street rather than in a private garage makes it more susceptible to theft. Physical hazards can be observed and mitigated.
Moral hazards can also cause a peril to occur, but this kind of hazard is abstract and harder to control. It refers to dishonest or careless conduct, like making a fraudulent claim or driving under the influence.
Alexandra Bosanac has been a content manager for RATESDOTCA since 2021, specializing in auto insurance. She began covering auto insurance in 2017. Alexandra has a bachelor's degree in journalism from Toronto Metropolitan University. Before joining the RATESDOTCA editorial team, she reported for the Canadian Business, the Toronto Star, the National Post, and the CBC.
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