When it comes to insurance—be it for your home, car, or business—no two policies are exactly alike. Each one can be customized to fit what you specifically need. Things like deductibles, premiums, and limits can change from one policy to another, and the same goes for the types of risks they cover. In this guide, we'll break down what an all-perils insurance policy is and why it might be worth discussing with your broker to see if it's the right fit for you.
What does all perils insurance cover?
All perils insurance, also known as an “all-risk policy,” is one of the broadest forms of coverage, covering everything except for what is listed in the exclusions section of your policy. Due to its broad nature, this coverage is optional and can be a little more expensive. All perils insurance coverage is available for your:
In the following sections, we will explore the common perils included in all perils coverage, as well as the typical exclusions associated with it, in detail:
Common perils included in all perils coverage
In insurance, a “peril” is typically defined as: “a chance event that is unexpected or accidental”. Some perils, or risks, that may be included in an all-perils policy are:
- Fire/lightning
- Windstorm
- Hail
- Theft
- Vandalism/Mischief
- Falling objects
- Weight of ice, snow, sleet
- Freezing
- Damage from electrical current
Common exclusions in all perils coverage
Some common exclusions for an all-perils policy are as follows:
- General wear and tear
- Neglect
- War and terrorism
- Some large-scale natural disasters, like flooding or earthquakes
- Nuclear disasters
- Intentional or fraudulent losses
- Events or items covered by other forms of insurance
What is the difference between all perils and specified perils coverage?
When it comes to all perils coverage and specified or named perils coverage, there are some key differences to note:
Amount of coverage
As mentioned earlier, an all-perils policy offers broad coverage, protecting you against anything that isn’t specifically listed in the exclusions section.
On the other hand, named or specified perils coverage is more limited. It only covers the specific risks listed in the policy. Anything not named is excluded, which often makes this type of policy more affordable. However, while it might cover some major risks, it could leave out some unexpected ones that you won't have coverage for.
Burden of proof
Another key difference between these two policies is the burden of proof. With an all-perils policy, the burden of proof is on the insurance company. This means they have to prove that a claim falls under one of the policy’s exclusions to deny it. This is different from a named perils insurance policy, where you, the policyholder, must prove that the claim falls within the covered perils.
Quick Tip: Both all perils and named perils policies cover certain risks and not others. The main difference is whether the policy includes or excludes those risks.
What are the benefits of all perils insurance?
An all-perils insurance policy offers the benefit of peace of mind, giving you coverage for a wide range of risks. It's a solid choice if you have a low tolerance for risk.
An example with home insurance
Let's say you buy your first home and, looking to save some money, you choose a more affordable named perils insurance policy to cover named hazards. You know it covers windstorms and fires, and you're saving $25 a month compared to the cheapest all-perils policy. Great, right? Over five years, you've saved $1,500.
But in the sixth year, your basement floods due to a burst water pipe. Since flooding wasn't one of the named perils, your insurance won't cover the damages. Now, you're looking at a $12,000 bill to repair and renovate your basement.
It's important to think about your risk tolerance and talk to your insurance broker to see if an all-perils insurance policy is the right move for you.
All perils coverage and deductibles
One small difference with all perils coverage compared to other options is how the deductible works. The deductible is the amount you pay out of pocket when you make a claim before your insurance kicks in to cover the rest.
Home insurance, business insurance, and car insurance all have different types of deductibles.
For example, with car insurance, there are separate deductibles for comprehensive and collision claims. But with all perils coverage, you only have one deductible for everything. This can make things simpler, but there's a catch: the deductible for all perils is usually higher than what you’d have for just collision or comprehensive coverage.
Fortunately, when you buy your insurance policy, you can often choose from a range of deductibles. This way, you can find an option that gives you the right balance between the level of coverage and the cost. However, it's important to note that, sometimes, you might not get to choose the deductible yourself—there are cases where the insurer sets it for you.
How do I know which coverage option is best for me?
Ultimately, the decision hinges on your individual circumstances and the level of protection you desire. In the following sections, we will delve into the most suitable coverage options tailored to your needs, complete with detailed examples to guide you through the decision-making process.
An example with car insurance
With auto insurance, in addition to mandatory coverage, there are two popular coverage options for an insured vehicle: collision and comprehensive coverage. Collision covers the cost of damage to your vehicle if you're involved in an accident with another vehicle or stationary object. Comprehensive covers basically everything else, like fire, water damage, falling objects, theft, and vandalism. Both coverages require a deductible in the event of an insurance claim.
If you need full coverage, including protection against collision-related damages, and you don't mind having a single deductible for both comprehensive and collision coverage, then an all-perils car insurance policy might be a good option for you. Plus, all perils coverage includes protection against theft of your vehicle by a household member, something standard comprehensive coverage doesn’t offer. While this may sound unlikely, it can be useful in certain situations, such as living with roommates you don't know very well.
But if either comprehensive or collision coverage isn't something you need and you'd rather save on your premium by having less coverage, then going with specified perils for your car insurance might be the way to go.
Call BrokerLink today
Still wondering which policy is right for you? Reach out to BrokerLink today. We'll help you navigate your options and tailor coverage to fit your specific needs. At BrokerLink, we take the time to listen and understand your needs - personal, car, or business-related, so we can help you find the insurance solutions that are best for you.
You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a customized quote in minutes.
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FAQs about All Perils Insurance
Are all perils included in homeowners’ insurance policies?
Yes, all perils insurance is an optional coverage that is available for home, auto and business insurance policies.
What does all perils insurance cover?
All perils insurance is one of the most comprehensive types of coverage available, protecting you against everything except what's specifically listed in the exclusions section of your policy.
How do I get an accurate price estimate for all perils coverage?
The best way to get an accurate price estimate is to request free insurance quotes from multiple insurance companies and then compare them. You can also work with an insurance broker who will do the leg work for you, finding you the best quote for what you need.
If you have any questions, contact one of our local branches.
