In Ontario, mandatory auto insurance is the minimum amount of coverage every vehicle owner must have. However, you may also decide on additional auto insurance coverage for extra peace of mind. Specified Perils coverage only covers you for perils named within your policy. Whether you own an older car that you may not drive too often or have picked up a brand-new ride, your coverage needs may vary greatly. In this article, we compare specified perils and comprehensive car insurance to help you determine which end of the spectrum your insurance needs lie.
Auto insurance basics
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. No matter what type of vehicle you drive, you have the option of choosing the level of insurance coverage that suits your individual needs. Depending on how much protection you want for your car, there are several options:
Specified Perils Coverage
Specified Perils coverage, or Named Perils, offers protection in the event of damage or loss to your vehicle resulting from explicitly-named events. This includes hail, windstorms, or lightning damage. Some other common named perils covered under specified perils include:
- Theft and attempted theft
- Rising water
- Damage during transport
- Falling or forced landing of aircraft or parts of aircraft or the stranding, sinking, burning, derailment or collision of any kind of transport.
Not all insurance carriers offer the same Specified Perils coverage. Therefore, it is important always shop around for the best rate for your specific coverage needs.
Referred to as “coverage against perils other than collision or upset”, Comprehensive car insurance covers repairs or replacement of a vehicle that suffers damage from something other than a collision. This can include a fire, theft, hitting an animal, vandalism or a wind/hail storm. Basically, factors that are often outside of your control.
You will notice that it covers many of the same types of perils as Specified Perils coverage:
- Extreme weather
- Falling objects
- Some instances of damage from collisions with wildlife
The Insurance Bureau of Canada (IBC) states that comprehensive coverage includes all perils, except for:
- Upset of the insurance vehicle
- Damage caused by theft by a person who resides with you or who repairs your car
What’s the difference between the two?
These two types of insurance coverage are very similar in the coverage they provide. 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. Another noteworthy difference between specified perils and comprehensive car insurance has to do with ownership of your vehicle. If you are financing or leasing your vehicle, the finance company may require you to have comprehensive coverage, as you don’t own your vehicle outright.
Finally, specified perils coverage is an optional coverage that may be added onto the mandatory insurance required in Ontario. Many car owners opt to include this coverage 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 you don’t want or need to have.
Comprehensive coverage is a wiser choice if you have a newer vehicle. Repairs or replacement of your vehicle will most likely cost more than your annual premium.
Comparing Specified Perils: Is it the best choice for you?
If your ride has more than a few miles on it, you may not be looking to get a ton of coverage. Here are some examples when Specified Perils makes the most sense:
- Your car is stolen, although it was old and nothing fancy. By choosing to purchase Specified Perils coverage, your rental vehicle will be covered so you can still drive to work or take your kids to school. And if your car is recovered with lots of damage, SP will look after the repairs.
- Your spouse is caught in a severe hailstorm and suffered much damage. Specified Perils coverage will look after getting your car repaired and repainted.
Similar to Comprehensive Coverage, Specified Perils offers very similar protection for your vehicle, but at a lower price. With Specified Perils, you only pay for the coverage you need. If your vehicle has a few miles on it, it may make sense to speak with your isure representative about Specified Perils coverage. If your car is on the newer side or if you are leasing or financing a new car, CC may be required. Check with your isure broker for more details when comparing Specified Perils to other coverages available.