The main difference between broad and comprehensive policies is the coverage offered for your belongings. In most cases, both policies cover the dwelling against risks except exclusions, while broad policies cover belongings for named perils only.
We reviewed the Insurance Bureau of Canada’s home-coverage guide, the federal home-insurance guide and FSRA’s property-insurance questions to learn more. The key is to compare the terms and conditions of how claims are settled.
What Is the Difference Between Broad and Comprehensive Home Insurance?
Neither form offers unlimited coverage. “All risks” still excludes certain perils, so compare the exact terms, limits, exclusions, deductibles and endorsements.
Comprehensive policies provide coverage against any cause of direct physical loss not expressly excluded for both your building and your contents. Broad policies provide open coverage for the building, but cover your contents for named perils only. For example, additional coverage for earthquake or water damage may be offered as optional coverage.
Broad and Comprehensive Home Insurance at a Glance
| Question | Broad form | Comprehensive form |
|---|---|---|
| Building peril basis | Commonly covers risks except exclusions. | Commonly covers all perils other than those excluded. |
| Contents peril basis | Applies to contents on a named-perils basis only. | Perils for contents are usually on a risks-except-exclusions basis. |
| Main decision | Can you accept a contents loss caused by something not named? | Is the wider contents wording worth the premium? |
| Still compare | Even with a broad-form policy, you should still compare exclusions, water options, limits, basis of settlement, deductibles and liability. | Compare the same items; the comprehensive label does not standardize them. |
What Is the Coverage Difference Between Comprehensive and Broad Home Insurance?
| Loss example | Broad-form question | Comprehensive-form question |
|---|---|---|
| A laptop is accidentally dropped | Accidental dropping is not covered unless it qualifies as a named peril. | This scenario may be covered under a risks-except-exclusions policy, subject to any applicable exclusions and the policy’s deductible. |
| Jewellery is stolen | Is theft a named peril under broad-form coverage? What special limit applies to jewellery? | Would theft be covered under comprehensive-form coverage, and what special limit applies? |
| Sewer backs up or surface water enters | If you have a broad-form policy, is there a water endorsement for sewer backup or surface water entering the building? If so, what is the limit and deductible? | Ask the same question; the comprehensive label does not guarantee this coverage. |
Separate Parts of a Home Quote
Replacement cost, liability and deductible choice are separate parts of a quote, not built-in differences between broad and comprehensive forms.
| Quote part | Question to ask |
|---|---|
| Peril basis | What causes of loss are covered for the building? For the contents? |
| Settlement basis | When an item is covered, is payment based on replacement cost or actual cash value? Under what conditions? |
| Limits and special limits | What limits apply to building, personal property and additional living expense coverage? Are there special sublimits on items like jewellery and other categories, such as works of art? |
| Deductibles | What is the deductible under basic coverage? Are there separate deductibles for water, wind, earthquake or other losses? |
| Liability | What limits apply? What exclusions exist? What terms and conditions apply in providing a legal defence? |
| Optional coverage | Do you have endorsements such as overland water protection, sewer backup, earthquake, service line or home-sharing coverage? |
Risks and Perils Excluded From Broad and Comprehensive Home Insurance
Damage caused by deterioration, wear, lack of maintenance, mould, vermin such as insects and rodents, intentional/criminal acts, war/terrorism, nuclear events, etc., is typically excluded. Some losses from earth and water events may also be excluded; however, the list of exclusions will differ from one insurance policy to another.
In some cases, an endorsement may be available for excluded perils. Availability, coverage limits and deductibles may depend on the insurer and/or the insured property.
Review water-related exclusions, as flood, groundwater, sewer backup, seepage, burst indoor pipes, etc. are different coverage items and are not interchangeable. Always refer to your policy regarding the specifics of your coverage.
Read More: Compare Overland Water Coverage and Flood Insurance
Replacement Cost and Actual Cash Value Are Separate
The policy’s settlement terms—not the broad or comprehensive label—determine whether a covered loss is paid at replacement cost or actual cash value.
Check how the policy settles losses for both the building and contents. Review repair or replacement deadlines, matching or obsolete-material provisions, and the rules for a cash settlement.
Read More: See How Replacement Cost Differs From Actual Cash Value
Should I Get Broad or Comprehensive Home Insurance?
If you’re OK with paying a higher insurance premium for broader contents coverage, and don’t think you’d be able to afford out-of-pocket losses caused by events outside the named-perils list, comprehensive is a good option for you.
If the premium savings are substantial, the named perils meet your needs, and you’re okay retaining any risk not named, broad is a good option.
Remember, however, that in either situation, expensive items can have sub-limits, maintenance remains excluded, and some older or higher-risk homes may not qualify for comprehensive coverage.
Questions to Ask Before You Buy
- Give me one example of a contents claim that broad coverage would decline but this comprehensive wording would consider.
- Which kinds of water damage, such as floods or sewer backup, are covered, optional or unavailable in your area? Some perils vary by address.
- Which kinds of valuable items have special coverage limits? What documentation is required to insure them? Do they need to be appraised, listed or scheduled?
- What conditions need to be met for your company to pay the replacement cost of your home or personal belongings?
- Is there more than one deductible that might apply to a single incident?