Understanding the Difference: Named Perils vs Broad Form Insurance Coverage in Ontario

When it comes to Ontario home insurance, understanding the type of coverage you have is crucial to ensure you’re adequately protected. There are two common types of insurance coverage; Named Perils and Broad Form. While they may seem similar, they have distinct differences that can significantly impact your protection.

Named Perils Insurance Coverage

Named Perils insurance coverage is a basic type of insurance that only covers specific risks or perils that are explicitly listed in your policy. This means that if a risk is not listed, it’s not covered. Common named perils include:

• Fire
• Lightning
• Explosion
• Theft
• Vandalism
• Windstorm
• Hail
• Water damage (e.g., burst pipes, flooding)

With Named Perils coverage, you’ll need to prove that the damage was caused by one of the listed perils. If the cause of damage is not listed, you won’t be able to make a claim.

Broad Form Insurance Coverage

Broad Form insurance coverage, on the other hand, provides comprehensive protection against a wide range of risks, including those not explicitly listed in your policy. This type of coverage is often referred to as “all-risk” insurance. Broad Form coverage includes all the named perils, plus additional risks such as:

• Accidental damage
• Unknown or unexplained damage
• Damage caused by unknown or unexplained causes

With Broad Form coverage, you don’t need to prove that the damage was caused by a specific peril. Instead, you only need to show that the damage occurred and was not intentionally caused by you, or an excluded peril.

Key Differences

The main difference between Named Perils and Broad Form insurance coverage is the scope of protection. Named Perils coverage is limited to specific risks, while Broad Form coverage provides comprehensive protection against a wide range of risks.

Here are some key points to keep in mind:

• Named Perils coverage is generally less expensive than Broad Form coverage.
• Named Perils coverage requires you to prove the cause of damage, while Broad Form coverage does not.
• Broad Form coverage provides more comprehensive protection, but may have higher premiums.

Conclusion

In conclusion, understanding the difference between Named Perils and Broad Form insurance coverage is crucial to ensure you have the right protection for your assets. While Named Perils coverage provides basic protection against specific risks, Broad Form coverage offers comprehensive protection against a wide range of risks. When choosing an insurance policy, consider your specific needs and risks to determine which type of coverage is best for you.

Remember, it’s always better to be safe than sorry. If you’re unsure about your insurance coverage, consult with us, and make sure you are getting the coverage you need.