Peril

What is a peril?

In insurance, peril means an event that causes loss or damage to property. Fire, flooding, or vehicle impact are all examples of perils.

When it comes to home insurance, perils take many forms, all of which pose a threat to the home, the property it sits on, or the stuff inside it. There are natural disaster perils, like earthquakes, tsunamis, or volcanic eruptions. There are weather-related perils, like hail, windstorms, or lightning. There are perils that come from direct human action, like theft or vandalism. Then there are the infinite other perils like fire, nuclear disaster, war, explosion… the list goes on.

Insurance policies use perils to describe what kinds of damage or loss the policy will cover. No insurance policy covers every peril; that would bankrupt the insurance company faster than they could print the policy documents. Instead, insurance policies separate perils into covered and excluded perils.

What perils does homeowner’s insurance cover?

When it comes to covered perils, there are essentially two types of home insurance policies: named perils insurance and comprehensive insurance.

Named perils home insurance policies include a list of perils that are covered. Only perils listed on the policy are covered.

Comprehensive policies are the opposite: they include a list of perils that are excluded. Any peril that is not excluded is covered.

We’ve got full-size definitions for both named perils and comprehensive policies if you’d like to know more.

There is no universal list of perils that are covered and perils that are excluded; each insurance company has their own offering.

However, there are a few perils that almost every home insurance policy covers, whether it’s a named perils or a comprehensive policy:

• Fire and smoke damage
• Windstorms and hail
• Theft
• Vandalism
• Impact by vehicles
• Weight of ice or snow
• Accidental damage from sudden and accidental escape of water

There are also some perils that are frequently excluded, regardless of the policy type:

• Pests (rodents, bed bugs, etc.)
• Wear and tear
• Slow leaks from plumbing
• War or terrorism
• Nuclear incidents
• Ground movements (earthquakes or landslides)
• Flooding (tsunamis or overland floods)

Not every policy is the same. For example, most policies sold by Square One include earthquake coverage and inland flood coverage.

If you’re unsure which perils your own home insurance policy offers protection against, make sure to check your policy documents. You should never assume your policy covers a peril just because other policies do.

What perils does car insurance cover?

Car insurance perils work a little differently. Mainly, in car insurance, perils that can damage a vehicle are usually grouped into two categories: collisions, and everything else.

Understandably, one of the most important perils facing a car is running into another car (or object, or the ground), or being struck by another car. There is also the complication of who’s at fault for a collision. So, even if collisions are a peril, there are several car insurance coverages that may come into play depending on the nature of the collision and who’s to blame for it. Visit our pages on collision coverage, DCPD coverage, and car insurance liability for more on these subjects.

Most other perils that can damage a vehicle fall under comprehensive coverage. This covers perils like fire, theft, vandalism, and striking live animals — most sources of physical damage that are not collisions.

Car insurance also includes options to buy specified perils or all perils coverage. Specified perils is like a stripped-down version of comprehensive, protecting against a short list of perils. All perils covers, well, all the perils. It combines collision and comprehensive coverage, and offers expanded theft coverage on top of that.

Car insurance is regulated provincially in Canada, so exactly which perils are covered vary depending on where you live (and sometimes depending on your provider).

Looking for another insurance definition? Look it up in The Insurance Glossary, home to dozens of easy-to-follow definitions for the most common insurance terms. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.