A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z A Absolute Liability: The legal concept, which states that a third party, will not be prejudiced by the actions of the insured.  This concept provides direct right of action against an insurance company to a third party so they may collect money owed to them even if an insured violated the terms of a policy. Abandonment: The voluntary relinquishment of rights and responsibilities in the property covered by the insurance contract.  This is forbidden in most insurance contracts. Accident Benefits: A compulsory coverage in all provinces except Newfoundland and Quebec, it pays defined amounts to an injured insured on a no-fault basis. Examples of coverage are rehabilitation expenses, death benefits and loss of income benefits. Act of God: A sudden and violent act of nature that could not have been foreseen or prevented. Actual Cash Value (ACV): The current cost of replacing an article with a similar one in the same condition and exposed to the same wear and tear. ACV is calculated by establishing the current replacement cost of any item and charging depreciation. Actual Owner: The person who actually paid for an automobile. Adjuster: A representative of an insurance company who works along with the insured to investigate, negotiate and settle an insurance claim. Agent: An independent person or firm authorized by contract to write business with a number of insurance companies, to provide coverage in accordance with the agreement and to collect premium on the insurance company’s behalf. All Perils: A type of coverage found under Section C of an automobile policy.  It is the broadest type of coverage that may be purchased and covers both Collision and Comprehensive losses. The coverage is limited by exclusions listed on the policy. All Risks: A type of policy used to insure a variety of things such as homes and boats.  It covers all perils except for the exclusions listed on the policy.  Appraiser: A competent person enlisted by an insurance company to value a specific piece of property. If the definition you’re searching for is not listed, please feel free to email us.  B Binder: An agreement by an insurance company to cover a risk, pending the issue of a policy. This may be verbal, in writing, or on a printed form.  Binding Authority: The authority given to an agent whereby they may provide coverage to an insured without first submitting the risk to an insurance company for approval. Bodily Injury: Injury or death to a person, who is not an insured under an automobile policy, i.e. a third party. This type of claim is paid under Section A: Third Party Liability. Broker: An independent person or firm authorized by contract to write business with a number of insurance companies, to provide coverage in accordance with the agreement and to collect premium on the insurance company’s behalf. Burden of Proof: A legal concept which states that the person (plaintiff) bringing a suit against another (defendant) is required to prove the allegations made against the defendant.  Burglary: The unlawful removal of property from a premise involving visible forcible entry. Business Interruption: Insurance protecting against business expenses and loss of income resulting from a fire or other insured peril. If the definition you’re searching for is not listed, please feel free to email us. C CasualtyInsurance: A term describing the following types of insurance coverage - Liability, Crime, Plate Glass, Accident and Sickness, Fidelity, Surety and Boiler and Machinery. Catastrophe: A sudden, great disaster. Cede: When one company reinsures its liability with another company, it cedes business. Essentially, one insurance company reinsures part of the risk with a second insurance company. Certificate of Insurance: A modified form of a policy issued to a party with an interest in a property.  It certifies the existence of insurance.  By issuing such a document, an insurance company agrees to notify the party of any cancellation of insurance. Civil Code: Enacted by the Quebec National Assembly, the Civil Code encompasses a series of articles.  These specified rules are the basis of the legal system in Quebec from which decisions are reached.  Claim: Any occurrence where an insured makes a formal request to receive compensation under a policy because of damage caused by an insured peril Class of Automobile: In determining premium, insurance companies divide vehicles according to the class they fall into.  For example, private passenger vehicles used for pleasure or business would be placed in one class while public automobiles such as buses and taxies would be placed in a different class. Collision or Upset: A type of coverage found under Section C of an automobile policy. It covers damage to an insured vehicle caused by colliding with another object or by upset. Another object includes a trailer being towed, another automobile and the surface of the ground or any object on or in the ground.  Common Law: The system of law employed in all provinces except for Quebec.  It is often referred to as Case Law as it is based on precedent.  Precedents are principles established from the decisions reached in previous similar court cases. Comprehensive: A type of coverage found under Section C of an automobile policy. It covers damage against any peril other than collision or upset subject to certain exclusions and limitations. Compulsory Insurance: Coverage required by Statute. Contra Proferentem (against the offender): A principal of law which states that the party who drew up an agreement is responsible for any ambiguity or errors contained within that contract. Consent: A legal term stating when one party has given authority to another party for a particular purpose. For example, Jack gave consent to Diane to drive his automobile. Diane is then given the authority to drive Jack’s automobile.  Consequential Damage: Damage that is an indirect result of an accident or fire, e.g. food spoiled through breakdown of a refrigerator. Contents:  In an automobile policy, it is described, as the personal effects of a person not permanently attached to the automobile. Contractual Liability: Liability that is assumed under a contract and is in addition to liability imposed by law. Coverage: The term used to describe insurance protection. If the definition you’re searching for is not listed, please feel free to email us. D Declaration: A statement signed by an insured, warranting that the information supplied is accurate. Deductible: The amount of the loss which the insured must absorb themselves. Deductibles vary in amounts and do not apply to all policies. Defendant: In a court of law, the party that a case is brought against. Depreciation: The reduction in value of property due to use, aging, deterioration, and obsolescence. Direct Compensation: Under a no fault system for vehicle damage, an insured recovers the damage to their automobile from their own insurance company as if they were a third party. The insured does not recover any vehicle damages from the third party insurance company. Direct Writer: Insurance companies who deal directly with the public through producers they employ to sell their products. Driving Record: In determining premium, insurance companies examine a driver’s driving record to determine their experience and the presence of any convictions. Duress:  When one party induces another into entering into a contract by use or threat of force, violence or other similar means, the contract was realized by duress. The contract would be voidable at the option of the victim. If the definition you’re searching for is not listed, please feel free to email us. E Earned Premium: The portion of the premium charged applicable to the part of the policy period that has already elapsed. Emancipation: A legal ruling which releases A minor from the obligation to be represented by a guardian to exercise his/her civil right. Endorsement: Any change to the wording of a policy that varies its terms. Exception: A difference listed in a policy, which amends the standard declarations, so as to provide the required coverage.  Exclusions: Those perils or events not covered by a policy. Expiry Date: The date when the period of insurance terminates. If the definition you’re searching for is not listed, please feel free to email us. F Facility Association: A non-incorporated non-profit association set up to provide a market for those vehicle owners who experience difficulty obtaining insurance through the regular market. Family Protection Endorsement – SEF 44: A popular endorsement used to provide additional benefits to an insured when they are involved in an accident with another motorist who has insufficient insurance to pay for the damage caused.  The endorsement will pay for the difference between the liability insurance limit of the insured’s owns policy and that carried by the motorist at fault. Fault Charts or Rules: Charts used by insurance companies to settle claims in an efficient fashion.  These charts outline different accident circumstances such as parking lot accidents or left hand overtakes.  The charts also outline the methods used to settle such claims. First Party: The insured is considered the first party in an insurance contract. Fixtures & Fittings: Parts or furnishings of a building considered as permanent attachments as opposed to moveable items such as stock, office furniture, etc. Fleet Policy: Automobile policy covering a number of vehicles belonging to one insured. Floater Policy: A policy that covers property that may be transported to different locations. A contractor may purchase a floater policy to protect his/her tools from a loss. Fraudulent Misrepresentation: A false statement or an intentional half-truth deliberately carried out with the intention of deceit. Fronting: An agreement whereby one insurance company issues a policy for a second insurance company in return for a fee.  If the definition you’re searching for is not listed, please feel free to email us. G General Agent: An agent who has special authority to act on behalf of a company in a province. An example of this special authority is the ability to appoint other agents or settle claims. Government Insurance: When a government corporation provides the mandatory automobile insurance to the public. Government insurers operate in Saskatchewan, British Columbia and Manitoba. Gross Negligence: The reckless, wanton, and willful misconduct causing bodily injury or damage to property.  In this case, the standard of due care has been ignored by such a wide margin that it almost amounts to an intentional act. Group Insurance: An agreement between an insurance company and a group of people sharing common characteristics to provide them with insurance at a special rate. Guaranteed Replacement Cost: A type of policy that repairs or replaces property without any deduction for depreciation. If the definition you’re searching for is not listed, please feel free to email us. H Hazard: The physical or moral feature of a risk that affects the probability or extent of a loss. Highway Victims’ Indemnity Fund: A fund set up by either the provincial government or by the insurance industry to compensate victims of accidents for which an uninsured or unidentified motorist is at fault. If the definition you’re searching for is not listed, please feel free to email us. I Implied Agreement: An agreement where both parties have acted in such a way that it is understood that a contract or agreement is in place even if there is no written or expressed agreement in place. Inception Date: The commencement date of an insurance policy. Indemnify: The cornerstone principle of the insurance agreement, it is to place an insured in the same financial position as just prior to the loss, no better or worse off. Independent Adjuster: An independent business person hired by an insurance company to represent it in investigating, negotiating and settling claims on its behalf. Inland Marine/Transportation Insurance: A term describing coverage for anything not insured under a property or casualty policy. It covers such things as account receivables, contractor's tools.  It may also cover such things as pipelines, bridges and tunnels. Insurable Interest: An insurance principle stating that a person is legally entitled to insure something when it may be shown that they would suffer financially in the event of a loss. Insurance: The undertaking of one person or company to indemnify another in the event that a peril covered by the insurance agreement occurs. Insurance Bureau of Canada: The national trade association of insurance companies who maintain statistics and represent the insurance company’s interest in various forums. Insurance Brokers’ Association of Canada: The national trade association of insurance brokers engaged in establishing the education, qualification and ethical standards for brokers. Insurance Company: The company providing the insurance coverage. Insured: The person whose risk of financial loss from an insured peril is protected by the policy.  Insurer: The company providing the insurance coverage. Interim Coverage: Temporary coverage granted to an insured before the policy is issued. If the definition you’re searching for is not listed, please feel free to email us. J We’re sorry, there is no material listed in this section of the glossary you requested. If you would like a term defined, please fell free to email us. K Key Person Insurance: Life insurance devised to insure individuals who are important to a business’s success. Knock-for-Knock Agreement: The first no fault system devised in England, each insurance company agrees to pay their insured’s automobile claim without regard for fault.  The insurance companies further waive any recovery rights against the other insurer. If the definition you’re searching for is not listed, please feel free to email us. L Lapsed: A term used to describe an expired policy, which has not been renewed, or a cancelled policy. Larceny: The taking away of property with the intention to defraud the owner. Legal Liability: Responsibility imposed by law for negligence resulting in bodily injury to persons and/or damage to their property. Legislation: Laws enacted by a government. Lessee: The person to whom property is leased Lessor: The person granting the lease. Liability Insurance: Type of insurance covering an insured’s legal liability for bodily injuries to others or damage to the property of others. Liability Insurance Card: Also referred to as a pink card, it is the card issued by an insurance broker to evidence the existence of automobile insurance. Libel: Any written or printed matter tending to injure a person’s reputation unjustly. Lien: A legal filing placed on a property or business to stop the owner from paying out funds to various parties without first paying the lienholder.  Lienholder: A person or corporation who places a lien against a piece of property or business because of non-payment of a debt.  Limit of Liability: The maximum amount, excluding legal defense costs, for which an insurance company is responsible for under a policy. Limited Waiver of Depreciation: An endorsement applied to an automobile policy that waives the application of depreciation for the repair or total loss of the vehicle in the event of an insured peril. Lloyds: Located in London, England, A unique insurance type organization where risks are placed with syndicates of investors represented by underwriters. Lloyds Broker: An insurance broker or agent who has the authority to place business with Lloyds. Loading: An additional rate or premium added to a basic rate or premium because of the additional risk involved for the insurance company. Loss: An occurrence leading to a claim under a policy, e.g. a fire. This word is synonymous with the word ‘claim’. Loss of Profit: Insurance against business expenses and loss of income resulting from a fire or other insured peril.  This word is synonymous with ‘business interruption’. Loss Payable Clause: A policy clause that names a party with an interest in a property who would receive payment in the event of a loss, for example, a mortgagee, bank, finance company. Loss of Use: Type of coverage provided by some automobile policies which provides an insured with a rental vehicle when theirs has been placed out of commission by an insured peril.   Loss Ratio: An important ratio used to measure an insurance company’s results, it is the percentage of claims to premiums. Loss Reserves: The funds an insurance company sets aside to pay for reported but outstanding claims.  The amount of reserves is legislated by the government of Canada. If the definition you’re searching for is not listed, please feel free to email us. M Marine Insurance: Insurance coverage for the hull and cargo of a boat in addition to the liability imposed onto others from the operation of the boat. Material Fact: A fact so important to a contract that withholding it would alter the terms of the contract or void it altogether.  Minimum Limits: The minimum amount of third party automobile insurance required by law. Misrepresentation: The submission of false, or the fraudulent omission of material information in connection with the insurance application. Moral Hazard: A moral characteristic of an insured that may increase the likelihood of a loss, e.g. integrity, honesty, experience. Mortgage Clause: A policy condition providing protection to the mortgagee in the event that the insured failed to comply with policy conditions. Mortgagee: The person, usually a bank, to whom property is pledged as security. Mortgagor: The person, usually the insured, who gives his property as security for a loan. Mutual Company: A co-operative insuring association organized and owned by its shareholders. Mysterious Disappearance: The loss of property in unexplainable circumstances. If the definition you’re searching for is not listed, please feel free to email us. N Named Perils: A type of insurance coverage where the perils insured are listed on the policy. Negligence: Omitting to do something which a reasonable person in similar circumstances would have done, or doing something which a reasonable person in such circumstances would not have done. No-Fault: An insurance concept where an insured recovers the damage to their automobile from their own insurance company as if they were a third party. The insured does not recover any vehicle damages from the third party insurance company. Non-Disclosure: The failure to disclose a material fact. Notice of Loss: A policy condition requiring the insured to notify the company immediately of any possible claim.  Null Contract: A contract that is deemed to have never existed in the eyes of the law, i.e. void contract. If the definition you’re searching for is not listed, please feel free to email us. O Onus of Proof (Onus Probandi): A legal concept which states that a person (plaintiff) bringing a suit against another (defendant) is required to prove the allegations made against the defendant. Out-of-Pocket Expenses: Reasonable expenses incurred by an insured during the claims process. With the proper receipts, insured may receive refunds from the insurance company. If the definition you’re searching for is not listed, please feel free to email us. P Package Policy: A single policy covering two or more separate risks for the same insured, with common effective dates and one overall premium. Period of Indemnity: The length of time during which benefits will be payable under a policy, e.g. accident benefits coverage could provide 52 weeks of income for continuing disability. Peril: The cause of a loss, e.g. fire, accident, burglary. Physical Damage Coverage: Referred to as Section C, it is the section of the automobile policy that covers the damage to the insured’s vehicle.  Under the physical damage section, an insured may purchase all perils coverage, collision coverage, comprehensive coverage or specified perils coverage. Physical Hazard: The exposure to a loss arising out of the physical features of the risk such as its location, construction or heating. Pink Card: Also referred to as liability insurance cards, it is the card issued by an insurance broker to evidence the existence of automobile insurance. Plaintiff: In a court of law, the party who begins the court proceedings against the defendant. Policy: The printed legal document issued to the insured by an insurance company setting out the terms of the insurance contract. Policyholder: The named insured under the policy. Preamble: Introductory section of a policy, including identification particulars. Premium: The price charged to purchase the coverage supplied by a policy. Prescription: It is the time frame after which a claim may not be brought to an insurance company. Prior Damage: Damage that existed prior to the loss.  This damage may not be claimed under an insurance claim. Priorities of Payments: A law that specifies how much of the total automobile policy limit will be applied to Bodily Injury and how much will be applied to Property Damage. Proof of Loss: A sworn declaration filled out and signed by an insured to detail their claim.  Most insurance companies will not release any insurance monies until this form is completed. Property Damage: Damage to the property of others, not the insured’s property. Pro Rata Cancellation: A method of calculating a return premium when an insurance company cancels a policy before its expiry date. The full proportionate part due for the unexpired term is returned to the insured. Provisions: The terms of the policy outlining the circumstances under which the benefits are payable. Proximate Cause: The effective cause of loss. Public Adjusters: Independent businesspeople hired by insured to represent their interest in the claims process. Punitive Damage: A fine levied against individuals by a court of law as a form of punishment for their actions. If the definition you’re searching for is not listed, please feel free to email us. Q Quantum: The value of an insured’s loss. If the definition you’re searching for is not listed, please feel free to email us. R Rate: The unit charge used to calculate the premium for the policy. Registered Owner: The person whose name appears on the ownership registration of the vehicle. Reinspection: The re-examination of work performed by a repair facility in order to determine if all the work was carried out as per the appraisal and at a high standard of workmanship. Reinstatement: To reactivate a cancelled or lapsed policy. Reinsurance: A system of passing part of a risk from the original insurance company to a second insurance company known as a reinsurer.  This system is designed to limit the original insurer’s liability on any one risk. Reinsurer: An insurance company who assumes the risk of another insurer under a reinsurance contract. Remote Cause: Any cause of loss that is not the proximate cause.  It is not the event that started a chain of events that led to a loss. Rather it is one event of many in a chain of events that eventually led to a loss. Renewal: The continuation of an insurance contract at the same terms and conditions. Replacement Cost: The cost to repair or replace an item with a new one without any deduction for depreciation. Retrocession: The reinsurance of reinsurance, e.g. a company reinsures a risk that it has accepted from another insurer.  Risk: It is the subject of insurance, e.g. the property insured.  Risk may also refer to the peril insured against, e.g. fire. Risk Management: To identify risks and undertake preventive methods to reduce the probability of their occurrence. Robbery: The unlawful removal of property from a premise involving the use of violence or the threat of violence. Running Down Clause: A clause within a marine policy which provides legal liability coverage if an insured collides with another vessel. Rupture: The sudden and accidental tearing asunder, cracking, burning or bulging of a plumbing system. If the definition you’re searching for is not listed, please feel free to email us. S Salvage: Property that has been damaged by an insured peril but still has some realizable value; this value is taken into account when determining the amount of the loss. Seasonal Dwelling: A summer cottage is an example of a seasonal dwelling.  Second Party: The insurance company is considered the second party in an insurance contract. Self-Insure:  When a person does not purchase any insurance protection and absorbs losses with their own money.  Severity of Loss: The dollar amount of a loss. Short Rate: When an insured cancels a policy before its expiry, the returned premium is based on this type of calculation.  The premium returned to an insured receives deductions to account for the administration expenses generated by the early cancellation.  Slander: The oral utterance or spreading of false information which damages a person’s reputation. Specified Perils: A type of insurance policy that provides protection against the perils (e.g. fire) named in the policy.  S.P.F. 1: The Standard Owner’s Automobile Policy that provides coverage for owners of private passenger vehicles. Staff Adjuster: A representative of an insurance company who works along with the insured to investigate, negotiate and settle an insurance claim. Standard Limits: The basic amounts of protection provided by an insurance contract. Statute Law: It is written law enacted by the Canadian federal government which overrides any common law dealing with the same point. Statute of Limitations: The time limit after which a claim or legal action may not commence. Statutory Condition: Conditions set out in an automobile insurance contract binding both the insured and the insurance company to a set of rules for certain events.  Provincial Insurance Acts require these conditions to be included in every automobile policy. Subrogation: The legal right of an insurance company to pursue the responsible party or their insurance company for the amount the insurance company has paid. The insurance company may only pursue the legal party once it has paid its insured for their damages. Subscription Policy: A single policy covering a risk that is shared amongst different insurance companies. This type of policy is issued for large insurance risks such as a factory. Substantive Law: The category of law addressing the rights and duties that each person has in society. Superintendent of Insurance: In each province, the office who legislates the insurance industry.  Its responsibility includes, amongst other things, the legislation of rate filing. Supreme Court: The highest level of court in a country. Its ruling is binding on all other courts. Surety Bonds: A type of insurance that guarantees the debt or performance of an obligation of one party to another. Syndicate: A group of insurance companies or underwriters who join together to insure certain risks on a co-operative basis. This is usually done because of the high value or hazard associated with an insured. If the definition you’re searching for is not listed, please feel free to email us. T Telephone Adjuster: A representative of an insurance company who works along with the insured to investigate, negotiate and settle an insurance claim.  They are responsible for claims that do not require a face-to-face interview. Tenants Package Policy: A policy specially designed to meet the normal insurance requirements of a private tenant, covering both personal belonging and liability, e.g. a person renting an apartment. Tender: An offer to enter into a contract. Theft: Any act of stealing, including robbery and burglary. Third Party: A person that is not part of an insurance contract but is claiming against the insured.  The insurance company and the insured are the other two parties. Threshold: A definition or description of a medical condition under which a third party may bring suit against an insured for injuries sustained. Thresholds are in effect in certain provinces such as Ontario. Tort: A civil wrong or injury caused by one person to another, e.g. negligence causing bodily injury. Total Loss: A vehicle or piece of property that is not economical to repair.  The cost of repairs exceeds the market value or replacement cost depending on how the policy is written. Treaty: A general reinsurance agreement setting out the terms under which a reinsurance company automatically accepts up to an agreed proportion of the ceding company’s liability for a specified class of business. If the definition you’re searching for is not listed, please feel free to email us. U Umbrella Policy: A special form of liability policy designed to provide protection over and above the protection afforded by the normal liability coverage. Under-Insurance: When the amount of insurance is less than the full value of the property insured. Underwriter: An employee of an insurance company, who decides on the acceptance, insuring conditions and rating of insurance applications. Unearned Premium: The part of the premium collected by an insurance company that it has yet to earn because its term has not expired. Unibody Construction: A type of vehicle construction where the frame and body are one piece made up of several components welded together.  Unoccupied: A premise that is complete with its content except that its occupants are temporarily away.  Utmost Good Faith (Uberrima Fides): A principal of insurance stating that both the insurance company and the insured have a duty to disclose all material facts with respect to a risk, whether they are asked or not. If the definition you’re searching for is not listed, please feel free to email us. V Vacant: A premise that has no contents and the normal occupants are absent. Valuation: Same as “appraisal” – a determination of the value of a specific piece of property. Valued Policy: A policy where the value of the property is agreed to at the beginning of a policy. Void Contract: A contract that is deemed to have never existed in the eyes of the law. Voidable Contract: A contract that may be voided at the request of one party. Voluntary Medical Payments: A type of coverage found under a homeowner’s policy that allows an insured to make payments to an injured party even if the insured is not legally liable. If the definition you’re searching for is not listed, please feel free to email us. W Waiver: A voluntary relinquishment of a known right by an insured or insurance company. Warranty: A promise on the part of the insured that a state of affairs will continue during the term of the insurance contract. Without Prejudice: A phrase, used in claims negotiation, meaning that any statement made during negotiation or any offer of settlement is not to be interpreted as an admission of liability. Wrap-Up-Policy: A policy issued to include all parties involved in a business venture, e.g. the contractors, the subcontractors etc. involved in the construction of a large building. Wording: The part of the policy that details all the conditions and stipulations that both the insurance company and the insured agree to.   If the definition you’re searching for is not listed, please feel free to email us. X We’re sorry, there is no material listed in this section of the glossary you requested. If you would like a term defined, please fell free to email us. Y We’re sorry, there is no material listed in this section of the glossary you requested. If you would like a term defined, please fell free to email us. Z We’re sorry, there is no material listed in this section of the glossary you requested. If you would like a term defined, please fell free to email us.