Whether it’s for your home, car or business – each insurance policy is different and can be tailored to your specific needs. While deductibles, limits and premiums can vary between policies, so can the types of risks covered. Understanding exactly what your policy covers is essential to ensuring that what you value most is protected properly.
In this blog, we’ll explain what an All Perils insurance policy is, and why you should consider speaking to your broker about whether it’s right for you.
What is All Perils insurance?
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 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:
- Vandalism / mischief
- Falling objects
- Weight of ice, snow, sleet
- Damage from electrical current
Some common exclusions for an All Perils policy are as follows:
- War and terrorism – these types of risks are very destructive and difficult to quantifiably predict, and are often excluded because of that.
- Some large-scale natural disasters – tsunamis, earthquakes and floods are often excluded.
- Nuclear disasters – the Nuclear Liability and Compensation Act was established to hold nuclear power plant operators responsible for damages caused by nuclear incidents.
- Intentional or fraudulent losses
What is the difference between an All Perils policy and a Named Perils policy?
As stated above, an All Perils policy provides broad coverage and includes everything that isn’t specifically included in the exclusions section of your policy.
A Named Perils policy offers the narrowest coverage, setting clear limits and only covering the named risks on the policy. Any perils not listed in the policy are excluded, resulting in a policy that is usually more affordable. However, while your Named Perils policy may include coverage for some larger risks, it may also exclude some unexpected risks that you won’t have coverage for.
Another difference between these two policies lies in the burden of proof. With an All Perils policy, the insurer usually has to prove that an exclusion exists; whereas with a Named Perils policy, it is your responsibility to prove that a loss occurred due to a named peril.
Pro Tip: The All Perils policy and the Named Perils policy both cover some risks and not others. The difference lies in whether the policy covers or excludes those risks.
Which type of policy is best for you? Speak to one of BrokerLink’s knowledgeable insurance advisors, who will help you navigate insurance options and tailor your coverage to fit your needs.
What are the benefits of All Perils insurance?
The benefits of an All Perils insurance policy is that it provides you with peace of mind knowing you have coverage for a broad range of risks. It is worth considering if you have a low-risk tolerance.
You purchase your first home and you’re trying to save money, so you opt for a more affordable Named Perils insurance policy. You know it covers you for windstorms and fires and you’re saving $25 per month compared to the cheapest All Perils policy. Bonus! After 5 years, it saved you $1500.
However, in year six, your basement is flooded due to a once-in-a-lifetime rainstorm. Since flooding was not one of the named perils, your insurance policy can’t help cover the damages. To repair and renovate your basement it will cost you $12,000 out of pocket.
Consider your risk tolerance and speak to your broker to gain a better understanding of whether it is worth purchasing an All Perils insurance policy.
Contact BrokerLink for your insurance needs
Still not sure which insurance policy is right for you? BrokerLink insurance advisers can help! We take the time to listen and understand your needs - personal or business related, so we can help you find the insurance solutions that are best for you.
FAQs about All Perils Insurance
Are all perils included in homeowners’ insurance policies?
All perils insurance is an optional coverage that is available for home, auto and business policies. Speak to an insurance expert to understand if an All Perils insurance policy is the right fit for your unique needs.
Should I get All Perils insurance coverage for my car?
All Perils insurance coverage is available for car insurance, and typically combines collision and comprehensive insurance under one policy. It can also help protect from theft, fire, water, and weather damage. In cases where you finance or lease a vehicle, check with your financial institution as some require you to have All Perils insurance.
What does an All Perils deductible mean?
An All Perils deductible refers to the flat dollar amount listed in your policy that you pay when a claim has been filed. If your deductible is $500, the insurance company pays for anything above that amount. To understand how a deductible works, along with other insurance terms, contact your insurance advisor.