-A-

ABANDONMENT:
Relinquishment of ownership of property that has been lost or damaged and "abandon" it to the Insurance Company for the purpose of claiming a total loss.

ACCIDENT:
1) An unusual fortuitous, unexpected, or unforeseen event or occurrence.
2) A mishap that is not expected or designed. An unforeseen occurrence at a given time and place causing physical injury to persons or damage to property.

ACTUAL CASH VALUE:
The actual or current value at the time of the loss. Actual cash value takes depreciation into consideration.

ADDITIONAL INSURED:
A person other than the named insured who is protected by the terms of the policy. Most automobile policies, for example, insure a specific individual as an insured, but also insures anyone driving with the insured's consent. The additional insured may be "named" or "unnamed."

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:
One 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.

ALL-RISKS POLICY:
A name given to an insurance policy which covers against the loss caused by all perils except those which are specifically excluded by the terms of the policy.

AMOUNT OF INSURANCE:
The limit of payment for which an insurer is liable under a policy.

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.

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.

AUTOMOBILE INSURANCE:
Insurance coverage that provides indemnity and/or compensation for injury or physical damage which ensues from the ownership, use or operation of an automobile.

- B -

BAILEE:
One to whom goods or property are entrusted for a stated purpose. Can be either gratuitous (for no consideration) or for hire (for consideration).

BETTERMENTS:
Physical improvements beyond simple maintenance or repairs that increase the value of a property.

BINDER:
A written or oral agreement given by an insurer to insure a risk, pending the issuance of a policy. A binder is deemed to be the policy and must be canceled in the same manner.

BROKER:
An independent person or firm that acts on behalf of the insured in placing business with insurance companies.

BUILDERS RISK INSURANCE:
Insurance coverage on property under construction, including loss to buildings, machinery and equipment. Materials incidental to construction are also covered.

BURGLARY:
Unlawful removal of property from premises involving visible forcible entry or exit.

- C -

COINSURANCE CLAUSE:
A clause in an insurance policy that requires the policyholder to carry a certain percentage of insurance in relation to the value of the property insured. If the policyholder fails to do this, then he or she will be responsible to pay for a portion of the loss plus the deductible.

COVERAGE:
The nature of protection afforded by a particular policy.

- D -

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.

DEDUCTIBLE:
The amount of money that the policyholder must pay when a claim will be paid by the insurance company.

DEPRECIATION:
Reduction in value of property through use, aging, deterioration and obsolescence.

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 higher the driving record, the lower the risk.

- E -

ERRORS & OMISSIONS INSURANCE:
Insurance covering the legal liability of professionals such as architects, engineers, accountants and insurance brokers. Most general liability policies exclude coverage to professionals. An errors and omissions policy will cover the mistakes or forgetfulness of one who offers a professional service.

EXCLUSIONS:
Risks, perils or properties defined in the policy as not covered.

- F -

FACILITY ASSOCIATION:
A pooling agreement between all automobile insurers in which a market is guaranteed for all licensed drivers and registered owners.

FRAUD:
An act of willful deception and dishonesty carried out with a view to securing some advantage, to which one is not entitled.

- I -

INSURED:
The entity (individual or business) whose risk of financial loss from an insured peril is protected by the insurance policy.

INSURER:
The company providing the insurance coverage.

- L -

LEGAL LIABILITY:
Liability imposed by law on individuals or corporations to pay for harm done to others.

LIABILITY INSURANCE:
Insurance which agrees to indemnify the insured for sums that he or she may be required by law to pay to third parties as damages for bodily injury or damage to property.

- M -

MISREPRESENTATION:
Misrepresentation is the assertion of a material fact which the insured knowingly distorts.

MORTGAGEE:
The person/company that loans money to another, taking the security of property in exchange (such as the bank that holds the mortgage on a house).

- N -

NEGLIGENCE:
Failure to use the degree of care expected from a reasonable and prudent person.

- O -

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).

- P -

PERIL:
The event that caused a loss covered by the policy (such as fire, windstorm, hailstorm).

PERSONAL LIABILITY:
A form of liability insurance for the insured in the event that they become liable to pay money for damage or injury caused to others. This form does not include automobile liability.

PRINCIPAL OPERATOR:
That person who will operate the vehicle for the highest percentage of time, usually the named insured.

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 of their liability.

- R -

REPLACEMENT COST:
The cost to replace or repair an item without deduction for depreciation.

RIDER:
Another name for an endorsement.

- S -

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 salable and some property may be partially damaged, but repairable and then salable.

SHORT RATE CANCELLATION:
The cancellation by the insured of a policy before its intended expiration. The insurance company pays a return premium which is less than the amount that actually remains unearned. In this way the policyholder has paid a penalty for a mid-term cancellation.

STATEMENT OF CLAIM:
A written statement by a plaintiff detailing the facts which support the claim against the defendant and the compensation sought.

STATUTORY CONDITIONS:
Special prescribed and standardized conditions that the Provincial Insurance Acts require to be included in fire, automobile, accident and sickness policies.

SUBROGATION:
Once an insurance company has paid a loss for which someone other than the policyholder is responsible, it may have the right to recover this loss from the guilty party. This right is called subrogation.

- U -

UMBRELLA POLICY:
A special form of liability policy designed to protect the policyholder for certain unknown contingencies over and above the normal coverage and to provide a higher limit of insurance.

UNOCCUPIED BUILDING:
A building with contents, but no occupant (occupant does intend to return).

UTMOST GOOD FAITH:
Literally, "of the utmost good faith": the basis of all insurance contracts. Both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information material to the proposed contract.

- V -

VACANT BUILDING:
A building with no occupants or furnishings.

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