Specified perils vs. comprehensive car insurance: what’s the difference?

This article has been updated from a previous version.

When it comes to car insurance, there are a lot of different waivers, policies, and add-ons available. It can be hard to keep track of which covers what.

One such case is when it comes to specified perils and comprehensive insurance. While these two policies are similar, there are small differences in what each cover. Here’s what you need to know about the differences between specified perils insurance and comprehensive insurance, and what protection each policy provides.

What is specified perils coverage?

Specified perils coverage is just what it sounds like — insurance coverage for your vehicle that covers only specified perils (i.e. those that are named in the policy). It is occasionally also called named perils, and is an optional type of auto insurance coverage.

Specified or named perils coverage is different from all-perils coverage, which offers some of the most extensive coverage available, combining comprehensive and collision coverage.

What does specified perils insurance cover?

Specified perils insurance covers damage or loss to your vehicle resulting from explicitly named events, such as hail, windstorms, or lightning damage.

Some other commonly named perils covered under specified perils coverage include:

• Fire
• Theft and attempted theft
• Rising water
• Earthquake
• Explosion
• Rioting
• Damage during transport

Specified perils coverage varies among different insurance companies — which is why it’s important to compare insurance rates for coverage specifics when shopping for auto insurance. Your level of coverage – and your rate – will vary depending on the level of coverage you opt for.

What is comprehensive insurance?

Like specified perils, comprehensive insurance coverage is a type of optional auto insurance coverage that protects your vehicle in the event of damage not caused by a collision.

What does comprehensive insurance cover?

Comprehensive insurance covers damage caused by things such as fire, theft, vandalism, extreme weather, and falling objects, and in some scenarios, damage from collisions with wildlife.

Comprehensive insurance does not cover damage or medical expenses as a result of a collision, or theft by a member of your household.

If you finance or lease your vehicle, you’ll likely be required to carry comprehensive coverage as part of the terms of your financing or lease agreement. However, if you own your vehicle outright, you can skip comprehensive coverage to help cut down on the cost of your premium. Many experts recommend removing comprehensive coverage if your premium exceeds the value of your vehicle.

Specified perils vs. comprehensive insurance: Which is better?

The main difference between specified perils coverage and comprehensive insurance is that specified perils will not cover vandalism or damage from falling objects, whereas comprehensive insurance will. Other than that, they are very similar in the coverage they provide. Additionally, specified perils coverage is truly optional, whereas the financing or lease company may require you to have comprehensive coverage if you don’t own your vehicle outright.

While specified perils coverage is an optional insurance benefit in a lot of places, including Ontario, drivers may opt to include this in their insurance package because it offers extra protection for many perils not covered under a standard auto insurance policy. The ability to pick and choose which perils you have coverage for means that you aren’t paying for coverage unnecessarily.

Keep in mind that if you lease or finance your vehicle, simply including specified perils on your insurance policy likely won’t be enough to satisfy the borrowing terms for your vehicle. You’ll have to upgrade to comprehensive coverage.

Comprehensive coverage is also a smart bet if you have a newer vehicle and repairs or replacement would cost more than your annual premium.

In either case, the right coverage is the one that fits your lifestyle and your budget. In all cases, compare auto insurance rates to make sure you're getting the best price for your needs.