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ABANDONMENT
Relinquishment of ownership of property that has been lost or
damaged and "abandoned" to the Insurance Company for the
purpose of claiming a total loss.
ABOVE-GROUND SWIMMING-POOL
Swimming pool built above ground level.
ACTUAL CASH VALUE
The actual or current value at the time of the loss. Actual
cash value takes depreciation into consideration.
ADDITIONAL INSURED
An individual or a corporation other than the one named in the
insurance policy who is protected by the terms of the policy.
Most automobile policies, for example, insure a specific
individual as an insured, but also insure anyone driving with
the insured's consent. The additional insured may be "named"
or "unnamed" in the insurance policy.
ADDITIONAL LIVING EXPENSE INSURANCE
Coverage applicable when an insured's dwelling is damaged by
an insured peril to such an extent that one cannot live in it
until repaired. This insurance pays the extra amount it costs
to live elsewhere until repairs are made, such as the cost of
living in a hotel.
ADJUSTER
An individual who represents an insurer on investigations and
dealings with respect to settlement of claims. This may be a
salaried employee of an insurer or one who operates as an
independent adjuster.
ALARM SYSTEM
System guarding against theft and/or fire.
ALL-RISK POLICY
A name given to an insurance policy that covers against the
loss caused by all perils except those which are specifically
excluded by the terms of the policy.
AMORTIZATION
The paying back of a debt by spreading the payments (which
include a portion of both principal and interest) over a
period of time.
AMOUNT OF INSURANCE
The limit of payment for which an insurer is liable under a
policy.
ANNUITY
A continuous disbursement of a fixed sum of money for a given
period of time. It may be a fixed annuity, offering a constant
rate of interest, or a variable annuity, which is adjusted
according to the performance of its underlying assets.
APPLICANT
The person or firm requesting insurance.
APPRAISE
To set and state in writing the true value of property.
ARBITRATION
Referral of a dispute to one or more impartial persons chosen
by the disputing parties to determine their rights and/or
obligations. The parties agree in advance to abide by the
arbitration agreement. Each party has a chance to be heard.
ARBITRATION CLAUSE
A clause in an insurance policy that provides arbitration in
the event of a disagreement.
ARSON
The deliberate and intentional burning of property by its
owner or by another person.
ASSET
What a firm or individual owns.
AUTOMOBILE FLEET
A group of automobiles under the same ownership and management
which may, because of the number, justify a discount in the
insurance premium. Usually five or more vehicles.
BAILEE
Person to whom goods or property are entrusted for a stated
purpose, whether in exchange for payment (consideration) or
not. Also called a Depository.
BINDER
Temporary proof of insurance of property, pending issuance of
a policy. The binder has the same value as the policy, and
must be terminated in the same manner as an issued policy
would be.
BOOK VALUE
A company's common equity value as determined from the firm's
balance sheet.
BREAK-AND-ENTER THEFT, "B&E"
Wrongful taking of property, without the consent of its owner,
following forced entry into a building or property.
BROKER
A person who offers direct to the public a selection of
various home, car and business insurance products from a
number of insurers.
BUILDERS RISK INSURANCE
Insurance coverage on property under construction, including
loss to buildings, machinery and equipment. Materials
incidental to construction are also covered.
CANCELLATION
Termination of a contract of insurance in force. Also known as
Termination, Dissolution.
CENTRAL VACUUMING SYSTEM
Vacuum-cleaning system integrated into a building's structure.
CERTIFICATION
Compliance with criteria defined by safe standards.
CHIMNEY
Shaft for conveying gases outside, connected to a dwelling via
either the exterior or the interior.
CLAIM
A requirement by an individual or corporation to recover a
loss covered by an insurance policy.
CO-INSURANCE CLAUSE
Clause in an insurance policy requiring the policyholder to
maintain insurance at least equal to a specified minimum
percentage of the actual cash value, failing which the
policyholder must bear, in addition to the deductible amount,
a proportionate amount of any partial loss. Also known as
Guaranteed amount clause, Average clause, Rule of
apportionment.
COLLATERAL
An asset that is pledged as insurance against the default of
payment of a debt.
COLLISION
Accident involving impact of a vehicle against another vehicle
or an object of some kind.
COMMERCIAL OCCUPANCY
The portion of a building used for the transaction of
business.
COMPREHENSIVE COVERAGE
A type of automobile insurance coverage.
CONVICTION
Conviction under the Highway Safety Code or any other
legislation governing vehicular traffic, for an infraction
such as, for example, failure in the duties of a driver
involved in an accident; violation of the traffic rules
pertaining to school buses.
CORPORATION, LEGAL ENTITY, CORPORATE BODY, CORPORATE PERSON
Corporation that does not include a partnership and is
considered a separate legal entity, empowered to enter into
and be bound by agreements.
COST
Dollar value.
COVERAGE
1. The nature of protection afforded by a particular policy.
2. Amount of insurance applicable to a person or property. At
times, interchangeable with the terms Insurance and
Protection.
CREDITOR
Corporation or individual to whom a sum of money is owed.
CURRENCY RISK
The risk that the exchange rate on a foreign currency will
fluctuate in a direction that damages the position of an
investor.
DAMAGE
Any material or bodily loss or harm.
DEATH BENEFIT
Amount stated in policy to be paid to a survivor upon proof of
death of the insured.
DEBRIS REMOVAL
A provision in an insurance policy most commonly found in fire
insurance, providing indemnification for the cost of removal
of the debris after a loss.
DECK
Roofless platform, generally made of wood and equipped with a
rail, adjoining a house, either overhanging or supported by
pillars.
DEDUCTIBLE
The amount of money that the policyholder must pay when a
claim is paid by the insurance company.
DEGREE OF RESPONSABILITY
Driver's share of responsibility for an accident.
DEPENDENCIES
In civil law, constructions and installations that are
accessory to a dwelling but separated from it by a completely
free space, or connected to it only by a fence or electrical
or other connection.
DEPRECIATION
Reduction in value of property through use, aging,
deterioration and obsolescence.
DISMEMBERMENT
Accidental loss of (or of the use of) a body part.
DRIVER'S LICENCE, DRIVER'S PERMIT
Official written authorization permitting the bearer to
operate a motor vehicle.
DRIVING CLASS
A term used when rating automobile insurance. Driving class
indicates age of the operator, and/or sex and/or vehicle use.
DRIVING RECORD
A driving record is given to each driver. The record is
determined by the experience, prior accidents, traffic tickets
(speeding) and driver training. The better the driving record,
the lower the risk.
EARNED INCOME
Any wages, salary, and income from employment.
EARTHQUAKE
Rare phenomenon involving movements of the earth's crust that
may be violent enough to cause damage to property or
dwellings.
EFFECTIVE DATE
Date on which a transaction comes into force.
ENDORSEMENT
An amendment added to a written document, particularly an
agreement between parties, such as an insurance policy,
altering its provisions.
EQUITY
Value of a property in excess of claims or liens against it.
EXCLUSIONS
Risks, perils or properties defined in the policy as not
covered.
EXTERIOR FINISH
Material used to build the outer walls of a dwelling. Also
referred to as Exterior cladding.
FIFO
The first-in, first-out accounting method of valuing
inventory. It assumes that the first units in are the first to
be sold and the units sold are costed at the initial price.
FINANCIAL RISK
Economic risk that is associated with the use of borrowed
funds (leveraged funds).
FIRE HYDRANT
Pipe, on the side of a street or wall of a building, with a
valve for drawing water, used by firefighters.
FIRE STATION, FIRE HALL
Building housing firefighting equipment and firefighters.
FIREPLACE
Type of heating used in some dwellings.
FRAUD
An act of willful deception and dishonesty carried out with a
view to securing some advantage, to which one is not entitled.
GENERAL PROVISIONS
Portion of an insurance policy that specifies the obligations
of the insurer and insured.
GLASS INSURANCE
Insurance against breakage of windows in an automobile or
building.
HEATING
Type of heating in a dwelling.
HIT-AND-RUN
The failure of the driver of a any kind of vehicle to stop
knowing that he or she is the direct or indirect cause of an
accident.
HYPOTHECARY CREDITOR
Corporation or person to whom a sum of money is owed et who
has registered its security on the properties (movable or
immovable) given as a guarantee by the hypothecary debitor.
INCREASE IN PERIL, INCREASE IN HAZARD
Circumstances causing greater peril.
INCREASE IN PREMIUM
Charging of a higher premium following alterations to a
contract or renewal of a policy.
INDEMNITY
Amount paid out as compensation for a loss incurred.
INSURANCE CERTIFICATE
Document issued by an insurance company or broker attesting
that a particular piece of property is insured.
INSURANCE LIMITS
Amount of indemnity limited to a fixed amount according to
category of property.
INSURED
Corporation or individual underwritten by an insurance policy
against the consequences of an event which could damage his
assets, life, health and physical well-being.
INSURED PERILS, RISKS COVERED
Perils identified in the insurance contract as being covered.
INSURER
The company providing the insurance coverage.
INTEREST RATE RISK
Risk associated with fluctuations in interest rates that have
the effect of making one financial instrument more appealing
than another.
ISSUE DATE
Date on which an insurance contract comes into force.
JEWELLERY
Watch, ring, necklace, chain, bracelet, brooch, etc.
LAY-UP
Suspension of some coverage while a motor vehicle or other
belongings are in storage.
LEASEHOLD IMPROVEMENTS
Physical improvements beyond simple maintenance or repairs
that increase the value of a property.
LEGAL LIABILITY
Liability imposed by law to pay for harm (material damage or
physical injuries) done to others.
LESSOR, LANDLORD
Corporate or private individual who leases property.
LIABILITY INSURANCE
Insurance which warrants the insured against the monetary
consequences of the obligation to indemnify the third party as
a result of an act of negligence.
LIFO
The last-in, first-out accounting method of valuing a
company's inventory. It assumes that the most recent additions
to inventory are the first ones to be sold and values them at
current market prices.
LIMITED LIABILITY
The nature of stocks restricts the amount of money an investor
may lose to the amount they have invested in case of company
bankruptcy. Shareholders are not liable for the debts of the
corporation.
LOSS FREQUENCY
Number of consecutive losses.
LOSS OF USE
Inability to use property that has destroyed or damaged by an
insured peril.
LOSS RATIO
Losses incurred expressed as a percentage of premiums. Also
referred to as Claims ratio.
MAKE AND MODEL
Manufacturer and model names of a motor vehicle.
MANUFACTURER (VEHICLE)
Name of the manufacturer of a make of automobile.
MATURE AGE DISCOUNT
Reduction of premium payable according to the age of the
insured.
MISREPRESENTATION
The assertion of a material fact which the insured knowingly
distorts.
MISREPRESENTATION, FALSE REPRESENTATION
Intentional provision of false information to an insurer by an
insured when giving a notice of loss.
MOTION SENSOR
Component of an alarm system.
MOVABLE PROPERTY
Property owned or used by an insured which does not qualified
as real estate.
NEGLIGENCE
Failure to use the degree of care expected from a reasonable
and prudent person.
NET ASSET VALUE PER SHARE
The market value of one unit of a mutual fund as quoted daily
in the papers. It is calculated as the total assets less
liabilities divided by the number of shares outstanding.
NEW BUSINESS
New insurance policy covering a particular risk.
NEW VALUE, REPLACEMENT VALUE
Cash value equivalent to what it would cost to purchase a new
item similar to one lost if it were new. In this case the
insurer applies no deduction for depreciation.
NO LOAD FUND
A mutual fund that does not charge an investor a fee for
buying or selling.
NUMBER OF UNITS, NUMBER OF APARTMENTS
Number of units in a residential building.
OCCASIONAL DRIVER
An operator, who is not the principal operator but will
occasionally operate the vehicle (such as a son or daughter of
the insured).
OUTBOARD MOTOR
Motor attached to the outside of a boat.
OVERINSURANCE
Insurance amount that is greater than the full value of the
insured property. Also referred to as Pyramiding.
OVERTURNING
Overturning of a motor vehicle.
OWNER
Person who owns property.
OWNER OCCUPANT, HOMEOWNER
Person who owns a dwelling and resides there permanently.
PENSION PLAN
A formal arrangement through which the employer, and in most
cases employee, contributes to a fund to provide the employee
with a lifetime of income at retirement.
PERIL
The event that caused a loss covered by the policy and which
could imply the intervention of the insurance company.
PERSONAL LIABILITY
A form of liability insurance for individuals in the event
that they become liable to pay money for damage or injury
caused to others. This form does not include automobile
liability.
PLUMBING
System of pipes for the conveyance of water or gas in a
building. Also, the work performed to install such a system.
POLICY
Contract between the insured and the insurer setting out the
terms and conditions of the insurance and specifying the
rights and obligations to which each party has agreed.
POLICYHOLDER
Person in whose name an insurance policy is written and who
pays the premiums. Not necessarily synonymous with "insured."
PORCH, VERANDA
Roofed gallery attached to the exterior of a building and used
for sitting out of doors. May be open or closed.
POWER OF ATTORNEY
Generally speaking, legal say over the affairs of another
person's assets and the ability to execute legal documents on
their behalf.
PREFERRED STOCK
Stock in a company that usually has no voting rights but that
generally provides an income stream through dividends and
receives priority of payment before common stock in the event
of bankruptcy.
PREMISES
Location and/or building insured.
PRICE-EARNINGS RATIO
The ratio of a firm's stock price to its earnings per share,
which is commonly used as a valuation tool of the stock.
PRINCIPAL OPERATOR
The person who drives the vehicle the most, usually the named
insured.
PROFESSIONAL THIRD PARTY LIABILITY INSURANCE
Insurance designed to indemnify the insured for loss incurred
through legal liability resulting from actions performed as
part of the practice of a profession.
PROOF OF LOSS
A formal statement made by a policyholder to an insurance
company regarding a loss. It is intended to give information
to the insurer to enable them to determine the extent
liability of the financial compensation to be paid for a
covered loss.
PROPERTY
A thing owned. Also, the right of ownership.
PROPERTY & CASUALTY (P & C) INSURANCE
Insurance covering property (e.g. home, car). Also called
General insurance, Damage insurance, Non-life insurance.
PUBLIC LIABILITY
Legal obligation to pay for damages caused to other
individuals or firms.
RATE
Fixed price for a certain coverage amount for a given period.
May be expressed in dollars, cents or as a percentage.
REAL RATE OF RETURN
The rate of return adjusted for inflation. A negative real
return indicates wealth destruction as the assets are worth
less today than yesterday.
RECONSTRUCTION COST
Appraisal enabling determination of the replacement cost of a
dwelling.
REFUND
Repayment of a portion of the insurance premium.
REINSTATEMENT
Restoration of insurance following lay-up.
REINSURANCE
Placing of a part of the insurance (i.e. a portion of the
risk) with another insurance company (the reinsurer), which
assumes the responsibility in return for a percentage of the
premium paid by the insured.
RENEWAL
Automatic continuation of an insurance contract upon payment
of the premium.
RENTAL VALUE, LEASING VALUE
Value of rental amounts lost following loss.
REPLACEMENT COST
The cost to replace or repair an item without deduction for
depreciation.
REPLACEMENT COST (AUTO)
Claim settlement without deduction for depreciation, but not
exceeding the vehicle purchase price.
REPLACEMENT VALUE
Cash value established for the replacement of an item
according to its current cost, without depreciation.
RETIRING ALLOWANCE
An amount received upon retirement from employment in
recognition of long service or, with respect to loss of
employment.
RIOT
Disturbance of the peace by a crowd of people.
RISK (Insurance)
An estimate of the probability that certain perils will occur.
RISK PREMIUM
Additional rate of return offered by assets that are risky
(the return is uncertain) in nature. The higher the risk, the
higher the risk premium. Historically the risk premium on
T-Bills is less than bonds, which is less than the risk
premium on stocks.
RISK TOLERANCE
The degree of risk an investor is willing to bear.
RISK UNDERWRITING
Analysis, as part of an insurability evaluation, of the
circumstances surrounding a risk for the purpose of assessing
its chances of being realized.
ROOF ASSEMBLY
Covering and supporting framework on top of a building.
SALVAGE
The remaining value of property after severe damage by fire or
other peril. The overall loss is reduced by the salvage value.
Damaged property may be quite saleable and some property may
be partially damaged, but repairable and then saleable.
SHARE
Represents one unit of ownership in a corporation.
SHORT CORD
Unit of measurement not recognized in Canada for the sale of
woodheat.
SHORT RATE CANCELLATION
The cancellation by the insured of a policy before its
intended expiration. The insurance company pays a return
premium that is less than the amount that actually remains
unearned. In this way the policyholder has paid a penalty for
a mid-term cancellation.
SLOW COMBUSTION STOVE
Means of heating a dwelling. Sometimes referred to as Slow
burning stove or simply Stove.
SPECIAL CONDITIONS
Specific criteria of a policy applicable to the specific
situation or needs of the insured and that determine, as the
case may be, the purpose of the insurance, the coverage
conditions, and the premium payable. Also known as Particular
conditions, Particulars, Schedule.
SPECIFIC INSURANCE
Refers to a policy covering items that are individually or
specifically described.
STANDARD CONDITIONS
Conditions valid for all insured who own the same type of
policy; basic conditions applicable to an insurance policy.
STARTER KILL
Device that prevents a vehicle engine from being started.
STATEMENT OF CLAIM
A written statement by a plaintiff detailing the facts that
support the claim against the defendant and the compensation
sought.
STORAGE
Safekeeping of property in a warehouse.
SUBROGATION
Process by which an insurance company pursues rights or
recovery against a third party responsible for insured loss or
damage after it has paid for the said loss.
SUBSIDIARY COVERAGE
Coverage consisting of accessory elements that support other,
more important elements.
SURCHARGE
Increase in premium amount according to perils.
TENANT, LESSEE
Individual or corporation who leases property from a lessor.
TERM LIFE INSURANCE
A form of life insurance providing coverage for a defined
period of years. It pays out a death benefit only (money
received upon the death of the insured if within the term of
the policy). It does not have a cash or surrender value.
TERRITORY
Underwriting element of an insurance premium relative to a
specific geographical area.
THEFT
Wrongful taking of property without the consent of its owner.
THIRD PARTY
Person other than the insurer and the insured who is involved
in a loss.
THIRD-PARTY LIABILITY AUTOMOBILE INSURANCE
Third-party liability automobile insurance is designed to
indemnify the insured for financial loss incurred through
legal liability for bodily injury and damage to property of
others caused by an accident arising out of ownership or
operation of an automobile.
TOTAL DISABILITY
Complete loss of physical capacities.
TOTAL LOSS
Loss value greater than replacement value of the property.
TRAILER
Motorless vehicle designed to be pulled.
TRANSPORTED GOODS
Goods transported in any type of vehicle.
TRUST
An asset established by one party for the benefit of another.
UMBRELLA POLICY
A special form of liability policy designed to protect the
policyholder for certain unknown contingencies over and above
normal coverage and to provide a higher limit of insurance.
UNDERINSURANCE
Insurance amount that is less than the full value of the
property insured.
UNDERWRITING FILE
Underwriting component of an automobile insurance premium;
depends on the number of years of driving experience and the
driving record.
UNIVERSAL LIFE INSURANCE
A life insurance policy that allows for a varying death
benefit and premium level over the term of the policy with
flexible investment options for the cash balance value of the
policy.
UNOCCUPIED BUILDING
A building with contents, but no occupant (occupant does
intend to return).
UTMOST GOOD FAITH
A basic principle of any insurance contract. Both parties to
the contract are bound to exercise good faith and do so by a
full disclosure of all information relevant to the proposed
contract. Also known by its Latin equivalent Uberrimae fidei.
VACANT
Status of a dwelling whose occupants have left it with no
intention of returning; also, status of any newly built
dwelling between the time the work is completed and the time
the first occupants move in.
VACANT BUILDING
A building with no occupants or furnishings.
VALUABLES
Articles of personal property having great worth.
VANDALISM
Intentional destruction or damaging of property motivated by
malice or revenge, referred to as Malicious mischief.
VEHICLE REGISTRATION NUMBER
Number appearing on a vehicle licence plate.
VIOLATION, INFRACTION
Breach of a law or of a regulation.
VOLUNTARY MEDICAL PAYMENTS
Coverage in the second part of the home insurance contract
providing for voluntary payment to the insured, for bodily
injury suffered by a person other than the insured and for
which medical expenses are incurred.
VOLUNTARY PROPERTY DAMAGE PAYMENT
Coverage in the second part of the home insurance contract
providing for voluntary reimbursement to the insured, for
repair/replacement of property other than the insured's.
WATERCRAFT, BOAT
Craft designed for navigation on water.
WHOLE LIFE INSURANCE
A form of insurance that provides coverage until the death of
the policy holder. It combines a death benefit with a savings
plan. The savings portion of the policy can be received before
death.
WINDSTORM
Weather phenomenon characterized by very strong winds capable
of damaging property or dwellings.
WOOD STOVE
Means of heating a dwelling.
WRAP ACCOUNT
An account offered by investment dealers whereby investors are
charged an annual management fee based on the market value of
invested assets. |
