|
Absolute liability
The liability of a wrongdoer’s automobile insurance company to pay someone
harmed by the wrongdoer, even if the wrongdoer has violated the terms
of the insurance policy, for example, by driving with an expired license.
This is subject to a limit, usually $200,000, and the requirement that
the wrongdoer in violation of the contract must reimburse the insurer.
Accident
An event that happens by chance and is not expected in the normal course
of events, which results in harm to people, damage to property or equipment,
or a loss of process or productivity.
Accident Benefits (AB)
The part of auto insurance that provides medical care and income replacement
benefits to insured persons injured in a car collision, regardless of
who caused the accident. In some parts of the country, this is referred
to as “Section B.”
Accident Benefits (AB) – CLEAR
The relative index based on the frequency of Accident Benefits (personal
injury) claims.
Accounts receivable coverage
This coverage can protect a business owner if he or she is unable to
collect outstanding balances as a result of lost or damaged account records.
Actual cash value
The actual cash value is usually the cost of replacing the property with
something of like kind and quality.
Actuary
An actuary is an employee of the insurance company who analyzes the financial
consequences of risk. An actuary uses mathematical models to predict
the financial outcomes of uncertain future events. For example, an actuary
will use mathematical business models to predict the cost of future natural
disasters to ensure that the insurance company has enough money set aside
(in “reserves”) to pay the claims that would result.
Additional premium
An extra charge for an alteration, during the policy period, which increases
the hazard or the insurance company's liability. For example, if you
installed a wood stove in your home, you would be charged an additional
premium.
Adjuster
An adjuster reviews and settles claims on behalf of the insurance company.
The adjuster could be an employee of the insurance company or an independent
contractor hired by the company.
Adjusting
The process of reviewing and settling losses with or by an insurance
company.
Agent
An insurance agent represents only one company and may sell many of that
company’s products. He or she can provide information about the insurance
products and rates for that one company only.
All-risk (All-perils) policy
See Comprehensive
Auto Insurance.
Application (“App”)
A form completed by a person seeking to buy insurance. On the basis of
the information entered on the form (possibly together with any information
from other sources), the insurance company decides whether or not to
provide insurance or modify the coverage offered.
Appraisal
A valuation of property made for determining its insurable value or the
amount of loss sustained.
Arbitration
An alternative to litigation for resolving a dispute between an insurer
and its customer or between insurers. An unbiased person or panel is
appointed to review the case and determine responsibility for paying
for the loss or the amount to be paid.
Arson
The wilful and malicious burning of property.
Assumed liability (contractual liability)
Liability for which a person has accepted responsibility by entering
into an expressed or implied contract.
Assurance
Same as Insurance.
Assured
Same as Insured.
Assurer
Same as Insurer.
Authorization
The power or right to act on behalf of another.
Avoidance of risk
Taking steps to remove a hazard, engage in an alternative activity, or
otherwise end a specific exposure.
B
Bad faith ^
back to the top ^
A party to an insurance contract is said to have acted in “bad faith”
if that party has deceived the other party or otherwise treated that
party unfairly. Examples are the withholding of relevant information
when the contract of insurance is negotiated or the unjustified denial
of a claim.
Basic insurance policy
See Named
Perils.
Binder
A temporary or preliminary agreement that provides coverage until a policy
can be written or delivered.
Bodily injury
A term, mostly used in automobile insurance, meaning physical injury
as a result of a car collision.
Boiler and machinery insurance
This coverage protects an organization against any losses that result
from a breakdown of heating, refrigeration, air conditioning equipment,
pressure vessels, boilers, production machinery, electrical apparatus
and/or electronic equipment.
Branding
A car is branded after an accident to indicate its state of disrepair
as one of the following:
Salvage — A vehicle that has sustained damage to the point where the
cost of fixing it exceeds its cash value prior to the damage.
Irreparable — A vehicle that is incapable of safe highway operation,
has sustained damage beyond repair and is only used for parts.
Rebuilt — A vehicle that was severely damaged but has been repaired and
inspected and met rigorous determined standards.
Stolen — A vehicle that has been stolen from its owner. Only the police
can apply or remove this brand.
Broad coverage
This provides comprehensive insurance coverage for buildings and named
perils coverage for contents.
Broker
An insurance broker sells insurance for more than one company.
Business interruption insurance
Business interruption insurance can provide funds to pay for fixed expenses
during a period of time when the policyholder’s business is not operational.
This coverage will pay fixed costs such as taxes, utilities and other
continuing expenses associated with running a business between the time
when the loss or damage occurs and the time when the lost or damaged
property is replaced or repaired.
^
back to the top ^
C
Canadian Loss
Experience Automobile Rating
See CLEAR.
Canadian
Standard for Automobile Theft Deterrent Systems (ULC S338)
This is the benchmark for all immobilizer theft
deterrent systems. In after-market systems, the Canadian Standard demands
that the immobilizer cut three vital circuits in the vehicle – the starter,
the ignition and the fuel supply – to disable the vehicle. In Original
Equipment Manufacturers (OEM) systems, the immobilizer disables the fuel
injection system to render the vehicle inoperable. The Canadian Standard
also requires that each theft deterrent system undergo extensive laboratory
testing. Immobilizers meeting ULC S338 offer a proactive means of preventing
vehicle theft.
Cancellation
During the policy period, either the insurer or the customer may terminate
coverage according to provisions in the contract.
Capacity
The amount of capital available to an insurance company, or to the industry
as a whole, for underwriting insurance coverage or coverage for specific
perils.
Captive insurance company
A company that is owned solely or in large part by one or more non-insurance
entities (e.g., a municipality) for the primary purpose of providing
insurance coverage to the owner or owners.
CGL
See Commercial
General Liability Policy.
Civil liability
An individual’s liability to others for harm caused to them by his or
her actions.
Claim
The exercising of a policyholder’s right under a policy to be paid by
his or her insurance company for certain financial losses suffered. A
claim can be any notification of a possible loss under an insurance policy,
whether or not any payment follows. For every claim that is reported,
the insurance company must set aside money (“reserves”) sufficient to
cover its anticipated cost.
CLEAR
CLEAR is the Canadian Loss Experience Automobile Rating. This is a method
for classifying different models of cars for insurance purposes by using
historical claims data, including Collision, Comprehensive, Direct Compensation
– Property Damage, and Accident Benefits coverages. CLEAR is used by
many insurance companies across the country.
Collision coverage
An optional type of automobile insurance coverage that pays for the cost
of repairing the insured vehicle if it is damaged in a collision or upset.
In some parts of the country, this is referred to as “Section C.”
Commercial auto insurance
This policy is designed to protect a business in the event of accident,
theft, injury and/or other damages involving business vehicles and business
staff while driving those insured company vehicles, or their own vehicles
or rented vehicles for business purposes. There are a variety of coverages
for commercial autos, depending on the business being operated and who
owns the vehicles being used.
Commercial General Liability
policy (CGL)
A standard form of liability insurance developed for use in the business
sector. It is usually contained in a broader mercantile policy also covering
property loss and business interruption.
Commercial lines
Refers to insurance for businesses, organizations, institutions, volunteer
groups, governmental agencies, and other commercial establishments.
Comprehensive auto insurance (also
known as “all risk, all perils”)
Optional auto insurance coverage that pays for damage to an insured vehicle
caused by any perils other than collision or overturning. Examples of
perils covered are hail, flood, theft, fire, glass breakage, falling
objects, missiles, explosions, earthquakes, windstorms, vandalism or
malicious mischief, riot or civil commotion, and collision with a bird
or an animal.
Compulsory insurance
Any form of insurance (usually auto insurance) that is required by law.
Conditions
Conditions are terms of insurance contracts that impose obligations an
insured person must satisfy in order to preserve coverage.
Contract
A way to make a promise legally enforceable.
Coverage
What the insurance contract covers.
Crime Stoppers
An international, non-profit civilian program that assists police in
solving crimes through tips reported by citizens who have knowledge or
a suspicion of a crime that has taken place. Since its establishment,
Crime Stoppers has contributed to solving more than half a million criminal
cases internationally, with a value of more than $3 billion.
D
Declarations (“Dec” sheet) ^
back to the top ^
The portion of the insurance contract that contains information such
as the name and address of the insured, the property insured and its
location and description, the policy period, the amount of insurance
coverage, applicable premiums, and any other information provided by
the insured.
Deductible
The portion of the loss covered by insurance that the policyholder must
pay himself or herself; the amount appears on the policy. If a policy
has a $1,000 deductible, the policyholder would pay the first $1,000
of any repair bill and the insurance company would pay the balance up
to the policy limits. Any loss that costs less than $1,000 would be the
policyholder’s own responsibility.
Depreciation
The decrease in the value of property over a period of time due to use,
wear and tear, and obsolescence. For example, if you paid $500 for a
television set five years ago, its current value minus depreciation might
be only $125. This will affect the amount of insurance payable if the
item is lost or destroyed (see “Actual cash value”) unless there is coverage
for replacement
cost.
Direct Compensation – Property Damage (Ontario,
Quebec, New Brunswick)
Covers damage to – or loss of use of – an automobile or its contents,
to the extent that the driver of another vehicle was at fault for the
accident. It is called “direct compensation” because, even though someone
else caused the damage, the insured person collects directly from his
or her insurer instead of from the person who caused the accident.
Direct loss
Damage to or loss of the insured property itself. It does not include
consequential loss or expenses incurred as an indirect result of the
damage, such as the cost of renting replacement items while the originals
are being repaired.
Direct writer
An insurance company that uses its own sales employees to sell its policies.
Sometimes refers to companies that contract with exclusive agents.
Directors’
and officers’ liability insurance (D&O)
Insurance that provides coverage for members of boards of directors against
“wrongful acts,” which might include actual or alleged errors, omissions,
misleading statements, and neglect or breach of duty on the part of the
board of directors.
Duty of care
The obligation that a person has to exercise reasonable care with respect
to the interests of others, including protecting them from harm.
Dwelling coverage
This applies to your home and “attached structures” such as a garage
or carport. Permanently installed outdoor equipment on the premises,
such as a swimming pool and the equipment attached to it, is usually
included. Building materials for use in construction, alteration or repair
of the insured dwelling or related structures on the premises are usually
covered, too, if they are on the site or adjacent to it. Theft and vandalism
losses during construction are usually not covered.
E
Earthquake insurance ^
back to the top ^
Coverage for damage caused by an earthquake as defined in the contract.
Effective date
The date on which an insurance policy or bond goes into effect, and from
which protection is furnished.
Embezzlement
The fraudulent use of money or property that has been entrusted to one’s
care.
Employers’ liability insurance
Protects an employer against injuries sustained by employees that fall
under common-law liability. This should not be confused with workers’
compensation liability, which is liability as defined by workers’ compensation
law.
Endorsement
See Rider.
E&O
See Errors
and Omissions insurance.
Errors and
Omissions insurance (E&O, professional liability insurance or malpractice)
This type of insurance may be appropriate for anyone who gives advice,
makes educated recommendations, designs solutions or represents the needs
of others, such as doctors, lawyers, engineers, teachers, financial planners,
consultants, software developers, ad copywriters, web page designers,
placement services, telecommunications carriers or inspectors. It can
be important coverage for anyone who deals with customers who could claim
that something done on their behalf was done incorrectly and that this
error cost them money or caused them harm in some way.
Exclusions
Events or circumstances described in policies which, if they happen in
a way that relates to the loss, result in there being no coverage.
Expiration
The date upon which a policy will end.
Exposure
Vulnerability to loss of an insurer (generally) or an insured (usually
with respect to liability insurance).
F
Facility Association ^
back to the top ^
The organization that ensures that anyone who is required to have car
insurance has access to it. For more information about the important
role of Facility Association in the insurance market, please visit
its website at www.facilityassociation.com
Fault determination rules
In Quebec, New Brunswick and Ontario,
charts or rules are used to determine fault or responsibility for Direct
Compensation – Property Damage claims, but not for injury claims in cases
of car collisions. In some other jurisdictions, insurers use inter-company "settlement" charts
for handling claims against each other; these are not legally binding
on the policyholder, however.
The circumstances of a collision may show that more than one driver was
negligent. Each driver's insurance company may then become involved in
the settlement based on the degree of responsibility attributed to each
person. If there is a dispute about responsibility, court action may
be required to resolve it.
Finding fault
See Fault
determination rules
Fire-resistive construction
A building that has its exterior walls, floors and roof constructed of
masonry or other fire-resistive materials.
First party
The person who is insured on the insurance policy. He or she is also
the “policyholder” or “insured.” There may be other people, named or
unnamed, who are covered as well.
Forgery
In general, any false writing with intent to defraud.
Form
An insurance policy itself or riders and endorsements attached to it.
Fortuitous event
An unforeseen accident – i.e., an event neither deliberately caused by
the insured nor bound to happen in the ordinary course of events.
Fraud (insurance)
Any act or omission with a view to illegally obtaining an insurance benefit.
In other words, any action allowing a claimant to walk away with money
to which he or she is not entitled.
Insurance fraud includes a full range of fraudulent acts, including completely
fabricating claims, inflating or padding genuine claims, making false
statements on insurance applications, and internal fraud.
Fraudulent claims represent approximately 10-15% of claims paid out.
General insurance fraud amounts to a cost of approximately $1.3 billion
per year in Canada. This cost is paid by honest policyholders in increased
premiums.
G
Garaging location ^
back to the top ^
The postal code where your vehicle is parked or garaged when not in use.
This is usually your primary residence.
GDL
See Graduated
driver’s licensing.
General insurance
See Property & Casualty
Insurance
General Insurance Ombudservice
(GIO)
Assists in the resolution of conflicts between insurance companies and
their customers. When disputes arise, GIO's mediators and experienced
customer service officers help insurance companies and customers work
toward a solution that is in the best interest of both parties in a fair,
independent and impartial environment. For more information about GIO
and its services, please visit their website at www.giocanada.org
GIO
See General
Insurance Ombudservice.
Government-run
auto insurance
In Manitoba, Saskatchewan and BC, consumers have no choice but to buy
their insurance from the provincial government. (Some optional coverages
can be purchased from private insurance companies). In Quebec, insurance
for injuries as a result of a car collision must be purchased from the
government.
Grace period
A period after the premium due date during which an overdue premium may
be paid without penalty. The policy remains in force throughout this
period.
Graduated driver’s licensing
A staged introduction of new drivers into the driving environment. Under
graduated driver’s licensing systems, new drivers earn more driving privileges
as they gain more experience and demonstrate that they are able to handle
increased risk.
Guaranteed replacement
cost endorsement (building)
Coverage that pays for replacement without reduction for depreciation
(see also Actual
cash value and Depreciation).
A guaranteed replacement cost endorsement covers any shortfall in the
event that the replacement cost of a building has been underestimated.
H
Hard market ^
back to the top ^
The part of the insurance cycle in which premiums rise significantly.
It is usually associated with a sharp decline in capacity.
(See also Soft
market).
Hazard
A condition that creates or increases the chance of a loss. For example,
fire, flood, liability, burglary, and explosion are hazards. Slippery
floors, unsanitary conditions, shingled roofs, congested traffic, unguarded
premises and uninspected boilers are also hazards.
HCMU – AB (Accident Benefits)
A relative index based on the frequency of Accident Benefits (personal
injury) claims.
HCMU – Collision
A relative index based on the cost per vehicle for Collision insurance
claims.
HCMU – Comprehensive
A relative index based on the cost per vehicle for Comprehensive insurance
claims (including theft).
HCMU – Relative claim index
A relative index based on the cost per vehicle for a specified coverage’s
insurance claims.
HCMU – Theft claim cost
A relative index based on the cost per vehicle for theft claims.
HCMU – Theft claim frequency
A relative index based on the frequency of theft claims (that is, the
number of claims reported as a percentage of the number of vehicles with
Comprehensive coverage).
High-risk automobile insurance
market
Consumers with a poor driving record (e.g., multiple driving infractions,
demerit points or criminal convictions involving driving), or no driving
record at all (i.e., new drivers), may, in many cases, be insured by
insurance companies that specialize in drivers who are high risk.
Hold-harmless clause/agreement
A clause or agreement written into a contract by which one party agrees
to release another party from all legal liability. For example, a retailer
may agree to release a manufacturer from legal liability in the event
the manufacturer’s product injures someone.
Homeowners insurance
An elective combination of coverages for the risks of owning a home.
It may include coverage for fire, burglary, vandalism, earthquake and
other perils.
I
IBAC ^
back to the top ^
See Insurance
Brokers Association of Canada.
IBC
See Insurance
Bureau of Canada.
ICBC
See Insurance
Corporation of British Columbia.
ICLR
See Institute for Catastrophic Loss Reduction
Immobilizer
An electronic anti-theft device that arms a vehicle automatically when
it is switched off, and prevents unauthorized starting of the vehicle.
(See also Canadian
Standard for Automobile Theft Deterrent Systems)
Incident
An event which, under different circumstances, could have resulted in
harm to people, damage to property or equipment, or loss of process or
productivity – for example, almost hitting a pedestrian with a car, or
a slip and fall that does not result in an injury. Sometimes an incident
is referred to as a “near miss.”
Indemnify
To compensate the insured person for a loss, in whole or in part, by
payment, repair, or replacement.
Indirect or consequential loss
(or damage)
Loss resulting from a peril, but not caused directly or immediately by
the peril. For example, loss of property due to fire is a direct loss,
while the loss of rental income as the result of the fire would be an
indirect loss.
Informed consent
An agreement intended to ensure that both parties understand the activities
being undertaken and the risks associated with them. Often used in conjunction
with a waiver or hold-harmless and indemnifying agreement.
Inspection
Independent checking of facts about an applicant or claimant, usually
by a commercial inspection agency.
Institute for Catastrophic
Loss Reduction (ICLR)
The insurance industry established the Institute for Catastrophic Loss
Reduction (ICLR) in 1998. It is a coordinated effort of the Canadian
home, car and business insurance community, the University of Western
Ontario and other partners to reduce – through research and education
– the loss of life and property caused by severe weather and earthquakes.
ICLR is working to improve Canadians’ capacity to adapt to, anticipate,
withstand and recover from natural disasters.
Insurance
A contract between an insurance company and its customer for a specific
period of time. It protects the customer financially against a loss.
Insurance is also a mechanism for dispersing risk, because it shares
the losses of the few among the many.
Insurance Brokers Association
of Canada (IBAC)
As the national voice of 25,000 home, car and business insurance brokers
in Canada, IBAC represents their interests to the government of Canada.
IBAC develops national licensing courses and professional development
programs for brokers, for delivery through its 11 provincial/regional
associations.
Insurance Bureau of Canada (IBC)
The national trade association for the companies that insure the homes,
cars and businesses of Canadians. IBC’s membership includes the companies
that provide more than 90% of the home, car and business insurance sold
in Canada. IBC works on behalf of member companies to advocate for public
policies that create and maintain a healthy insurance marketplace that
serves insurers and consumers. IBC facilitates communications and seeks
consensus among its members and, when possible, seeks out and implements
solutions to common insurance concerns.
Insurance Corporation
of British Columbia (ICBC)
The government-run
insurance company from whom all drivers in British Columbia must
purchase mandatory or compulsory car insurance.
Insurance Institute of Canada
The professional education arm of the general insurance industry in Canada.
Insurance policy
A document setting out the terms of the contract of insurance. It is
usual for a policy to be issued but, for most forms of insurance, this
is not a requirement.
Insurance representative
A customer’s main point of contact for insurance needs. This could be
an insurance broker or agent. It could also be an employee of the insurance
company itself.
Insurance to value
Insurance written in an amount approximating the value of the property
insured.
Insured
The person (or persons) whose risk of financial loss from an insured
peril is protected by the policy. Sometimes called the “policyholder,”
“customer” or “assured.”
Insurer
The insurance company. Sometimes called the “assurer.”
J
K
L
Lapse ^
back to the top ^
Termination of a policy at the end of its term.
Lessee
The person to whom a lease is granted. A lessee of real property is commonly
called the “tenant.”
Lessor
The person granting a lease.
Liability
This is a legally enforceable obligation. Liability insurance pays for
the damages or losses suffered by others for which the insured person
is legally responsible.
Liability limits
The amount or amounts beyond which an insurance company does not protect
a person insured for liability coverage. For example, a common liability
limit for an auto insurance policy is $1 million. If a policyholder is
successfully sued for more than $1 million, the balance of the judgment
would be paid out of the policyholder’s pocket.
Libel
A written statement about someone that is personally injurious to that
individual.
Loss of use insurance
Optional coverage purchased to compensate for the loss of use of property,
if it cannot be used because of a loss covered by the policy. This is
most common in auto insurance. For example, loss of use insurance will
have the insurance company pay for the use of a rental car while the
insured car is being repaired.
M
Malpractice insurance
See Errors
and Omissions.
Manitoba Public Insurance (MPI)
The government-run
insurance company from whom all drivers in Manitoba must purchase
mandatory or compulsory car insurance.
Material misrepresentation
When a policyholder or applicant makes a false statement of material
(important) fact on the application, he or she has committed a material
misrepresentation, which may result in loss of coverage.
Moral hazard
A position taken by an insured that increases the chance of a loss or
the seriousness of a loss.
MPI
See Manitoba
Public Insurance.
Mutual insurance company
Mutual insurance companies are home, car and business insurance companies
without stockholders. The owners are the policyholders. It is the policyholders
(the owners) who elect the directors of the company.
N
Named insured ^
back to the top ^
The person in whose name the policy is issued (see Insured or Policyholder).
Technically, he or she would be the first party to the contract, the
second party being the insurance company that issues the policy.
Named perils (or basic) insurance policy
Covers only those perils, such as fire and theft, that are specifically
named in the insurance policy.
Negligence
To fail to do what a reasonable and prudent person would do (or to do
what such a person would not do); this can result in property damage,
injury or death.
No-fault
This type of automobile insurance provides some compensation for personal
injury and death arising out of a motor vehicle accident, with payments
made regardless of who caused the loss. However, it does matter who caused
the accident; if found to be at fault, a driver may experience an increase
in future premiums.
O
Occupier ^
back to the top ^
A person, company or other group that owns, has possession of, or has
responsibility and control over premises.
Occupiers' liability
An individual or organization in possession of property (i.e., the occupier)
owes a duty of care to those who come onto the premises. The occupier
must take reasonable care to protect others from harm that might result
from programs on the premises or at the hands of a third party on the
premises. For example, an occupier should ensure that the building is
safe by shovelling sidewalks in the winter.
Occurrence
An event that results in an insured loss. In some lines of insurance,
such as liability, an occurrence is not necessarily an accident (something
sudden or unexpected); it can result from continuous or repeated exposure
to a risk. Nonetheless, an occurrence results in bodily injury or property
damage that was neither expected nor intended by the insured.
Optional coverage
In automobile insurance, optional coverage is a commonly used term for
insurance that is not required by law, such as coverage for collision
or comprehensive claims (e.g., theft).
For home insurance, optional coverage is that which is not normally included
in standard home insurance policies, but which can be purchased separately,
such as coverage for damage from earthquakes, furnace oil spills and
sewer back-up.
P
PACICC ^
back to the top ^
See Property
and Casualty Insurance Compensation Corporation.
P&C insurance
See Property
and casualty insurance.
Pain and suffering
A non-economic loss for which recovery may be available against the wrongdoer
in a lawsuit.
Peril
This is the cause of loss or damage. A homeowner’s policy, for example,
insures against perils like windstorms, fire and theft.
Personal articles floater
A personal articles floater provides all-risk coverage, subject to reasonable
exclusions, for valuable items such as furs, jewellery, cameras, silverware,
etc. The items are generally listed by description and value. This should
not be confused with a personal effects/property floater.
Personal effects/property floater
Coverage for personal property, anywhere it may be in the world. Typically,
this type of floater is issued in one of two forms, all-risk (or broad)
or specified perils.
Personal injury
An injury, other than physical, arising out of false arrest or detention,
malicious prosecution, wrongful entry or eviction, libel or slander,
or violation of a person's right to privacy.
Personal lines insurance
Home or auto insurance for individuals, as distinguished from commercial
lines insurance for businesses.
Personal property insurance
Home insurance covers the contents of a home and other personal property
that the named insured and members of the household own, wear or use
(including clothing, cameras, furniture, etc.) while on the premises.
It may even cover personal property of others (excluding roomers or boarders
who are not related to the insured) that is not otherwise insured. There
will normally be coverage for personal property while it is temporarily
away from the home anywhere in the world (see also “Personal effects/property
floater”). Personal property not normally kept at home is not covered.
Personal property in a warehouse is usually covered against theft without
time limit, but other perils may not be covered, or may be covered only
up to 30 days.
Personal property insurance
coverage limitations
The maximum amount a policy will pay, either overall or under a particular
coverage.
Physical damage coverage (automobile)
The section of an automobile policy that provides cover for damage to
the insured vehicle. It may cover all perils, collision or upset, all
perils other than collision or upset (comprehensive) or specified perils.
Policy expiration date
The date when an insurance policy expires. This date can be found on
the current Declaration (or "Dec") page, insurance identification
card, or recent cancellation notice.
Policy limit
The maximum amount an insurer will pay under a policy, either overall
or under a particular coverage.
Policyholder
Same as Insured.
Pool
A group of insurers or reinsurers who insure particular types of risks.
Premiums, losses and expenses are shared in agreed-upon amounts.
Premium
An insurance premium is the money the policyholder pays to the insurer
for financial protection against specific risks for a specific time-span.
Unlike the premiums for many forms of life insurance, general insurance
premiums are not intended to produce a reward other than financial peace
of mind.
Private passenger vehicle
A vehicle not used as a commercial vehicle. For example, if a small van
is used as a family vehicle, it is considered a private passenger vehicle.
However, if this same van is used as a full-time delivery vehicle, it
is considered a commercial vehicle.
Product recall insurance
Designed for manufacturers, this coverage insures against the unexpected
cost of recalling a product from the market due to faulty design, errors
in manufacturing, or intentional tampering not caused or known by the
insured and that may cause harm to customers.
Professional liability insurance
See Errors
and Omissions.
Proof of loss
A formal statement by the insured when making a claim to the insurance
company regarding the loss. The purpose of the proof of loss is to give
the insurance company information about the loss to enable it to determine
its liability under the policy and the amount it will be required to
pay.
Property and casualty (or general)
insurance
This is the branch of the insurance industry that covers home, car and
business insurance. (The other branch of the industry is life and health
insurance.)
Property and Casualty
Insurance Compensation Corporation (PACICC)
In the unlikely event of the collapse of a home, car or business insurance
company in Canada, the industry-funded, non-profit Property and Casualty
Insurance Compensation Corporation (PACICC) will respond to claims of
policyholders under most policies issued by home, car and business insurance
companies. This protection is extended automatically to eligible policies.
Q
Quote ^
back to the top ^
An estimate of the cost of insurance, based on information supplied to
the insurance company.
R
Rate
The amount, established or reviewed by government, used to calculate
premiums to be paid on an auto insurance policy.
Regular insurance market
When the insurance business environment is operating effectively, low-risk
consumers find that auto insurance is available to them from any insurance
company and at a reasonable price.
Reinsurance
Insurance purchased by an insurance company from another insurance company
(reinsurer) to provide it protection against large losses on cases it
has already insured. Essentially, insurance for insurance companies.
Relative claim index – CLEAR
The relative index based on the cost per vehicle for a specified coverage’s
insurance claims.
Replacement cost
The cost of replacing property without deduction for depreciation. (See
also Actual
cash value and Depreciation)
Residual market
A system through which insurance is made available to customers that
represent unusually high risks. This insurance is provided through Facility
Association
Rider (or endorsement)
An amendment to an insurance policy. It is used to add or remove coverage.
Risk
A chance of loss or injury for which an insurance claim may be submitted.
For a risk to be insurable, related events that could result in a claim
must be unexpected (see Accident and Occurrence).
For example, the possibility that a visitor to a policyholder’s home
will injure himself or herself by falling on the steps is an insurable
risk, because such a fall would be unexpected. Expected losses, such
as the gradual wearing-out of clothes or the rotting of fruit, are not
insurable risks.
Risk management
Risk management is the steps that an organization takes to identify and
understand the risks to which it is exposed and to create and implement
an effective plan for preventing losses or reducing their impact. A risk
management plan includes strategies and techniques for recognizing and
confronting the threat of loss. Risk management may be as uncomplicated
as asking and answering three basic questions:
What can go wrong?
What will we do (both to prevent the harm from occurring
and in response to the harm or loss)?
If something happens, how will we
pay for it?
S
Salvage ^
back to the top ^
On paying for a total loss of property, an insurance company takes title
to what remains of or what is recovered of the property. This is a
right of salvage.
Saskatchewan Government Insurance
The government-run
insurance company from whom all drivers in Saskatchewan must purchase
mandatory or compulsory car insurance.
Second party
The insurance company that issues the policy is considered the second
party of the two parties needed to form a legal contract. The first party
is the policyholder.
Section A
See Third-party
liability.
Section B
See Accident
Benefits.
Section C
See Collision
coverage.
Section D
See Uninsured
motorist coverage.
Soft market
The part of the insurance cycle in which there is insurance capacity and
policies are sold at lower prices (see also Hard
market).
Special event
Specific presentations, performances or celebrations that mark a special
occasion or are used to achieve goals and objectives. Special events
usually fall outside an organization’s scope of normal operation.
Standard of care
The degree or level of service, attention, care and protection that a
person owes another person according to the law (see also Duty
of care).
Standard risk
A person who, according to a company's underwriting standards, is entitled
to purchase insurance protection without special restrictions.
Subrogation
An insurer may try to recover some or all of its costs for settling a
claim by suing others responsible for the loss. The effect is roughly
the same as if the policyholder were to sue the responsible party himself
or herself, except that the policyholder is compensated more quickly
by his or her own insurer.
Substandard insurance
Insurance for those persons who do not qualify for insurance at standard
rates or terms.
T
Terrorism ^
back to the top ^
An ideologically motivated unlawful act or acts, including but not limited
to the use of violence or force or threat of violence or force, committed
by or on behalf of any group(s), organization(s) or government(s) for
the purpose of influencing any government and/or instilling fear in
the public or a section of the public.
Theft claim cost – CLEAR
The relative index based on the cost per vehicle for theft claims.
Theft claim frequency – CLEAR
The relative index based on the frequency of theft claims (that is, the
number of claims reported as a percentage of the number of vehicles with
Comprehensive coverage).
Third party
Anyone who is not a party to an insurance contract is a third party.
For example, in an incident giving rise to an automobile insurance claim,
a "third party" could be someone other than the insurance policyholder
(see first
party) who was injured and/or whose property was damaged by an insured
car.
Third-party liability (auto) insurance
Covers an insured if his or her car injures someone else or damages property
and he or she is held legally responsible. In some parts of the country,
this is referred to as “Section A.”
Tort
A tort is a wrongful and harmful action addressable by some appropriate
legal remedy.
Total loss
A loss of sufficient size that it can be said there is nothing left of
value. The complete destruction of the property.
U
Underinsured motorist coverage ^
back to the top ^
A form of insurance that pays for the bodily injury or property damage
caused by the owner or operator of an inadequately insured automobile.
Underwriter
An underwriter is an employee of an insurance company who looks at an
insurance application and decides whether or not the insurance company
can or should provide the applicant with insurance, based on the risk
that person presents.
Underwriting profit or loss
The amount of money that an insurance company gains or loses as a result
of its insurance operations. It excludes investment transactions and
income taxes.
Underwriting rules
The rules used by insurance companies to assess the risk they are taking
on by insuring a particular customer. These rules are set individually
by insurance companies.
Uninsurable perils
These are events or situations for which insurance coverage cannot be
purchased. The damage as a result of these incidents is usually predictable
or preventable. For example, if you build your house on a flood plain,
your house will, at some point, be flooded. Flooding, in this case, is
an uninsurable peril.
Uninsured motorist coverage
A form of insurance that pays for the bodily injury or property damage
caused by the owner or operator of an uninsured automobile. In some parts
of the country, this is referred to as “Section D.”
V
Valuable
papers insurance ^
back to the top ^
Insurance that protects a business's valuable documents, such as architectural
drawings, law libraries, medical reference books, etc.
Valuation
Appraisal estimation of the value of an item.
Vandalism
Physical damage to property by malicious mischief.
Vehicle identification number (VIN)
This is the number usually found on the dashboard of a vehicle on the
driver's side, and is usually listed on the vehicle registration and
title. The VIN is a combination of letters and numbers 17 characters
in length that can be used to identify the make, model, and year of a
car.
Vicarious liability
The liability an organization takes on for the actions of those who function
on its behalf – for example, the liability of a volunteer organization
for the actions of a volunteer while that person is doing volunteer work
for the organization.
VIN
See Vehicle
identification number.
VIN switch
VIN switching is a technique used by car thieves to disguise the identity
of a stolen car. The VIN of a stolen vehicle is replaced with the VIN
from a legitimate vehicle, one that is not registered as stolen. The
criminal then tries to sell the stolen vehicle. Often, criminals will
also develop false registration papers for the vehicle.
W
Waiver ^
back to the top ^
The act or instance of intentionally giving up a right. A waiver can
also be a document or a clause in a document that states that rights
are being given up or waived.
Warranty
A warranty is a term in an insurance contract wherein a party, usually
the insured, undertakes to do or refrain from doing something in order
to maintain coverage. A warranty is similar to a condition but must be
strictly, as opposed to substantially, complied with.
X
Y
Z
|
|
