So, what are “specified perils” in insurance? Here, we’re explaining what this insurance term means in simple language. That way you’ll be prepared the next time you’re shopping for an insurance policy.
So what are specified perils, and how does it affect your coverage?
As insurance brokers, that’s what we’re here to simplify.
In insurance, a peril is essentially a risk that can be covered.
This includes things like fire, water and glass breakage. With specified perils, you’re only covered for the risks that are explicitly listed in your policy.
We get into the details of exactly what these risks are below.
Jump ahead to learn what you need:
- What are specified perils in insurance?
- Specified perils vs. comprehensive coverage
- What are the different types of perils?
- What is not covered in specified perils?
- What is the difference between all perils and specified perils?
- What are examples of covered perils?
What are specified perils in insurance?
In Canadian insurance, “specified perils” refer to a type of coverage in property insurance policies.
In short, specified perils coverage provides protection for specifically listed risks otherwise known as “perils” that are explicitly mentioned in the policy.
These perils typically include common threats like fire, lightning, theft, vandalism, and certain natural disasters like windstorms or hail.
Specified Perils vs. Comprehensive Coverage
Unlike comprehensive or “all-perils” insurance”, which covers a broader range of risks (unless excluded), specified perils only covers the perils explicitly named in the policy.
It’s often chosen by policyholders who want more affordable coverage, as it can be less expensive than comprehensive coverage policies.
As a policyholder, make sure that you understand the list of specified perils in your insurance policy to ensure you have adequate coverage for your circumstances.
If a peril isn’t listed, it won’t be covered unless specifically added through endorsements.
An insurance broker like KBD Insurance can help you decide what the best coverage is for your circumstances, and walk you through your policy.
Give us a call.
The team at KBD will be happy to help.
What are the different types of perils?
Perils, which pose threats to your home or property, fall into different categories.
In general, here are the four different categories of insurance perils:
- Weather-related perils: This includes damages caused by hail, wind, or lighting.
- Natural disaster related perils: In Canada, common natural disaster perils include flooding, storms, tornadoes, etc.
- Perils related to human cause: This includes events like theft, vandalism, and more.
- Other perils: War, explosion, nuclear disaster, etc.
If you’re unsure about whether a specific peril is listed on your policy, make sure that you ask your insurance broker.
Have questions about your specified perils coverage?
What is not covered in specified perils?
Remember: If you have specified perils coverage, any perils that aren’t explicitly listed in your policy are not covered.
The exception is if you add it through endorsements or choose a more comprehensive policy.
Common exclusions in specified perils insurance can include:
- Floods and overland water damage: These are typically not covered and require a separate policy or endorsement.
- Earthquakes: Earthquake coverage is generally excluded but can be added as an endorsement.
- Damage from freezing pipes: Unless it’s explicitly listed, this type of damage might not be covered.
- Gradual wear and tear: Specified perils policies don’t cover damage caused by aging or deterioration. In fact, no insurance policy does.
- Business-related losses: If you run a business from your home, your business-related losses may not be covered.
- Intentional damage: Deliberate acts of damage or vandalism are not covered.
When it comes to your own policy, make sure to review its exclusions to understand what’s not covered so that you don’t experience any surprises in the event of a claim.
If there are specific risks that you want protection for, be sure to discuss them with your insurer to determine if additional coverage is needed.
That way, you can address any gaps in your insurance.
Need insurance coverage?
Give us a call.
What is the difference between all perils and specified perils?
In Canada, the key difference between all perils coverage and specified perils insurance lies in the scope of coverage they provide in property insurance policies.
- All Perils Insurance Coverage: This type of coverage offers broader protection. It typically covers all risks and perils unless they are explicitly excluded in the policy. Because it provides a more comprehensive coverage for a wide range of incidents, it tends to be more expensive. You can read our blog explaining all perils insurance coverage in-depth here.
- Specified Perils Insurance Coverage: With specified perils coverage, you get protection only for the specific risks or perils that are explicitly listed in your policy. These perils usually include common threats like fire, theft, vandalism, and certain natural disasters. Specified perils insurance is more limited in scope but can be more affordable since it covers a narrower range of risks.
Give the team at KBD a call.
What are examples of covered perils?
In Canadian insurance, covered perils are specific risks or events that your insurance policy protects you against.
Some common examples of covered perils in property insurance include:
- Fire and Smoke: Most policies cover damage caused by fires, including smoke damage.
- Theft: Theft coverage protects against the loss of your belongings due to theft or burglary.
- Vandalism: Damages caused by acts of vandalism, such as graffiti or property destruction, are typically covered.
- Wind and Hail: Damage from windstorms and hail, which are common in many parts of Canada, is usually included.
- Lightning Strikes: Coverage extends to damage caused by lightning strikes, which can lead to fires or electrical system damage.
- Explosions: Damage caused by explosions, such as gas explosions or other accidental blasts, is typically covered.
- Falling Objects: If a tree limb, satellite dish, or another object falls and damages your property, it’s often covered.
- Snow accumulation: Damage from the weight of ice or snow accumulation, like a collapsed roof, is generally included.
- Aircraft or Vehicle Impact: Damage resulting from aircraft or vehicle collisions with your property is typically covered.
Remember: It’s important to carefully review your policy to understand which perils you’re covered for.
You can also consider adding endorsements or additional coverage if you live in an area prone to specific risks not included in a standard policy.
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So, let’s recap.
Perils are covered risks on your insurance policy.
Specified perils is a coverage option where particular risks are only covered if it’s explicitly included on your insurance policy.
So, unlike all perils coverage, you’re only covered for select perils.
You can work with your broker to decide which coverages are appropriate for your situation, and whether you’ll need any additional endorsements.
Still have questions about your specified perils coverage?
We’ll be happy to help you out.