Glossary of Terms

AUTO

Accident Benefits
This insurance is used to provide medical payments coverage as well as scheduled death and disability benefits incurred by a person injured while occupying, entering or alighting from a covered vehicle. It provides coverage regardless of fault but does not insure injury to employees.

Automobile Liability - Primary
This coverage is used to protect against claims alleged for bodily injury and property damage arising from the ownership, maintenance or use of any covered auto.

Automobile Physical Damage
This coverage is used to protect the covered vehicle itself. It pays for physical damage losses that result from a covered peril.

Collision/Upset Coverage
This coverage is used to provide protection against loss or damage to a covered vehicle resulting from collision or upset.

Comprehensive Perils Coverage
This coverage is used to provide protection against loss or damage to a covered vehicle resulting from loss excluding collision or upset.

Deductible
A policy may include a deductible in its provisions. This limit specifies the amount that will be deducted from any payment made to you because of a covered loss.

Drive Other Car Coverage
This endorsement is used to provide coverage when individuals other than covered insured’s borrow or rent cars in their names and do not have the protection of a Personal Auto policy. It extends your policy to cover these named individuals for these exposures.

Emergency Service Expense
This coverage reimburses you for towing and emergency service expenses necessitated by the disablement of your insured automobile. The amount covered is stated on the form and does not include the cost of parts or supplies, gasoline, oil, batteries or tires.

Family Protection Endorsement
This coverage is used to pay for all sums that covered persons should have been legally entitled to have recovered from a third party but were unable to collect because the third party did not carry adequate limits of insurance. The coverage pays for the difference between what you should have collected and what you were able to collect up to the endorsement limits.

Loss of Use
This endorsement is used to extend your Auto policy to include coverage for the reimbursement of rental charges that are incurred by you because of the temporary loss of use of a covered auto that results from an insured loss under Section C of your policy.

Racing Car Exclusion
This exclusion will eliminate coverage for the ownership, use or operation of any auto designed or modified for racing purposes.

Recreational Vehicle Endorsement
This endorsement extends your Auto policy to include coverage for unlicensed, unqualified or underage drivers while specified recreation vehicles are being used off public highways as defined in the form.

Replacement Cost (New Cars)
This endorsement is used to provide Replacement Cost coverage to specified vehicles if they suffer an insured physical damage loss within the first two years of their purchase date.

Specified Perils Coverage
This coverage will insure against loss to a covered vehicle resulting from fire, explosion, theft, windstorm, hail, earthquake, flood, malicious mischief or vandalism and the sinking, burning, collision or derailment of any conveyance transporting the covered auto.

Uninsured Motorists Protection
This coverage will pay all sums you would have been legally entitled to recover from a third party but were unable to collect because the third party had no insurance or could not be identified (hit and run driver). It pays up to the minimum limits of the province where the accident occurred or the limits of your home area whichever is less.

Valued Coverage
This endorsement specifies that the vehicle(s) listed in the policy will be valued for the amounts stated for each vehicle in case of a covered loss. This differs from an actual cash value basis in which the amount paid is figured on replacement cost less depreciation.

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HOMEOWNER'S

Blanket Coverage
This form allows for a single limit of insurance to apply to two or more property items at one location or to two or more kinds of property at several locations instead of a specific amount applying to a specific subject of insurance. It allows you to move property from any covered location to another with no impairment of recovery as long as the amount of coverage complies with the coinsurance requirement specified in the policy.

Cemetery Property Coverage
This coverage is used to provide protection for grave markers or other specified property of others usual to a cemetery.

Co-Insurance
A policy may contain a coinsurance clause requiring that the limit of coverage be a minimum percentage (usually 80%) of the insurable value of your property. If the amount of insurance carried is less than required by this clause, any claim payment may be reduced by the same percentage as the deficiency. For example, covered property worth $100,000 may require a minimum of 80% or $80,000 of coverage for compliance with the policy's coinsurance requirement. If only $60,000 of coverage is carried (25% less than the required $80,000), then any loss payment would be reduced by 25%.

Comprehensive Perils Coverage
This coverage will protect your covered property against direct loss arising from any cause not specifically excluded. The advantage of this form is that the insurance company must prove that a loss is specifically excluded in order to deny coverage under the policy.

Condominium Contents Coverage
This coverage is used to extend your Condominium policy to insure those listed property items that are used, but not owned, by your association. It is needed because your by-laws do not clearly detail who is responsible for insuring such property. Normally, this property is covered under the member's own personal policy.

Deductible
A policy may include a deductible in its provisions. This limit specifies the amount that will be deducted from any payment made to you because of a covered loss.

Earthquake Coverage
This coverage will provide protection against loss do to earth movement including earthquake shocks and volcanic eruption.

Furs and Jewelry Coverage
This endorsement is used to provide extended coverage for jewelry, furs, watches and precious stones as outlined in the form. Limited protection is provided in the Property policy, but the additional coverage is needed since the value of these items can be of significant amounts.

Household Personal Property
Coverage for your household property is provided as a percentage of the limit of your residential dwelling amount. Additional coverage is available to increase this amount, if necessary.

Improvements and Betterments
This provision is used to extend your Property insurance to include coverage for the loss of use of alterations or additions that you have made in the building you rent of lease. This is important since these improvements become the property of the building owner and you will not be compensated for their loss of use after damage unless you have this coverage.

Inflation Protection
This coverage is used to automatically increase the limits of insurance on your covered property by a predetermined amount. Its purpose is to eliminate the risk that inflation will lead to coinsurance penalties and underinsurance.

Loss Assessment Fees
This coverage is designed to handle fees incurred by loss assessment against members of the condominium association after a loss. The endorsement can cover this additional cost under the association's policy rather than by assessing each individual member.

Market Value Valuation
This loss settlement clause is used for goods or commodities that are traded on established market exchanges. It obligates your carrier to adjust losses to such property based on the current market prices posted on the date of loss.

Named Perils Coverage
This coverage will protect your covered property against direct loss arising from one of the perils listing in your policy. To recover, you must prove that the loss was caused by one of these listed perils.

Office Equipment Floater
This policy will cover office contents for specified limits while at covered locations, in transit and temporarily off premises. Tenant's improvements and betterments can also be included as covered items.

Property Off-Premises
This provision is used to extend the personal property coverage to include limited protection for property while temporarily located away from the covered premises. Please note that it does not cover these items while they are in-transit, at a fair or exhibition or in the care, custody or control of a salesperson. Separate insurance must be purchased for these exposures.

Replacement Cost
This loss valuation method pays for the cost to repair or replace damaged items with like kind and quality without deduction for depreciation. This is important since you could face a substantial loss if you must replace property at today's prices but receive only the depreciated value of the property that was destroyed.

Replacement Cost on Personal Property
This coverage will allow you to replace all items destroyed by a covered peril without deduction for depreciation as long as the property is replaced by like kind and quality.

Stated Amount Valuation
This endorsement is used to protect you against being considered a coinsurer is a loss occurs. With it, your company agrees that the amount of coverage purchased is adequate and any coinsurance requirements are waived for a specific period of time.

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LIFE INSURANCE

Death Benefit
Provides income tax-free money to your named beneficiary that can be used to pay funeral expenses, debt, tuition, estate taxes or virtually any financial need you leave behind. It can provide business security by enabling partners to buy out the interests of a deceased partner and prevent a forced liquidation.

Living Benefit
The cash value growth of a permanent life insurance policy is tax-deferred, which means you do not pay taxes on the growth of the cash value unless the money is withdrawn. Loans or withdrawals can be taken against the cash value of a permanent life insurance

Term Life Insurance
Term provides life insurance protection for a specified period of time. If you do not currently have life insurance, term can be a good place to start. It's generally less expensive than permanent life insurance, and is available in varying term periods with fixed premiums from a one- (annual renewable term) to 20-year period (level term). Furthermore, term insurance is sometimes convertible to permanent coverage, providing you with flexibility as your needs change.

Whole Life Insurance
Whole life is a form of permanent life insurance that remains in force during the insured person's lifetime, provided premiums are paid as specified in the policy. Whole life insurance can build cash value.

Universal Life Insurance
Universal life is a form of permanent life insurance characterized by its flexible premiums, flexible face amounts and unbundled pricing structure. Universal life can build cash value, which earns an interest rate that may adjust periodically, but is usually guaranteed not to fall below a certain percentage.

Back

Glossary of Terms

AUTO

Accident Benefits
This insurance is used to provide medical payments coverage as well as scheduled death and disability benefits incurred by a person injured while occupying, entering or alighting from a covered vehicle. It provides coverage regardless of fault but does not insure injury to employees.

Automobile Liability - Primary
This coverage is used to protect against claims alleged for bodily injury and property damage arising from the ownership, maintenance or use of any covered auto.

Automobile Physical Damage
This coverage is used to protect the covered vehicle itself. It pays for physical damage losses that result from a covered peril.

Collision/Upset Coverage
This coverage is used to provide protection against loss or damage to a covered vehicle resulting from collision or upset.

Comprehensive Perils Coverage
This coverage is used to provide protection against loss or damage to a covered vehicle resulting from loss excluding collision or upset.

Deductible
A policy may include a deductible in its provisions. This limit specifies the amount that will be deducted from any payment made to you because of a covered loss.

Drive Other Car Coverage
This endorsement is used to provide coverage when individuals other than covered insured’s borrow or rent cars in their names and do not have the protection of a Personal Auto policy. It extends your policy to cover these named individuals for these exposures.

Emergency Service Expense
This coverage reimburses you for towing and emergency service expenses necessitated by the disablement of your insured automobile. The amount covered is stated on the form and does not include the cost of parts or supplies, gasoline, oil, batteries or tires.

Family Protection Endorsement
This coverage is used to pay for all sums that covered persons should have been legally entitled to have recovered from a third party but were unable to collect because the third party did not carry adequate limits of insurance. The coverage pays for the difference between what you should have collected and what you were able to collect up to the endorsement limits.

Loss of Use
This endorsement is used to extend your Auto policy to include coverage for the reimbursement of rental charges that are incurred by you because of the temporary loss of use of a covered auto that results from an insured loss under Section C of your policy.

Racing Car Exclusion
This exclusion will eliminate coverage for the ownership, use or operation of any auto designed or modified for racing purposes.

Recreational Vehicle Endorsement
This endorsement extends your Auto policy to include coverage for unlicensed, unqualified or underage drivers while specified recreation vehicles are being used off public highways as defined in the form.

Replacement Cost (New Cars)
This endorsement is used to provide Replacement Cost coverage to specified vehicles if they suffer an insured physical damage loss within the first two years of their purchase date.

Specified Perils Coverage
This coverage will insure against loss to a covered vehicle resulting from fire, explosion, theft, windstorm, hail, earthquake, flood, malicious mischief or vandalism and the sinking, burning, collision or derailment of any conveyance transporting the covered auto.

Uninsured Motorists Protection
This coverage will pay all sums you would have been legally entitled to recover from a third party but were unable to collect because the third party had no insurance or could not be identified (hit and run driver). It pays up to the minimum limits of the province where the accident occurred or the limits of your home area whichever is less.

Valued Coverage
This endorsement specifies that the vehicle(s) listed in the policy will be valued for the amounts stated for each vehicle in case of a covered loss. This differs from an actual cash value basis in which the amount paid is figured on replacement cost less depreciation.

Back

HOMEOWNER'S

Blanket Coverage
This form allows for a single limit of insurance to apply to two or more property items at one location or to two or more kinds of property at several locations instead of a specific amount applying to a specific subject of insurance. It allows you to move property from any covered location to another with no impairment of recovery as long as the amount of coverage complies with the coinsurance requirement specified in the policy.

Cemetery Property Coverage
This coverage is used to provide protection for grave markers or other specified property of others usual to a cemetery.

Co-Insurance
A policy may contain a coinsurance clause requiring that the limit of coverage be a minimum percentage (usually 80%) of the insurable value of your property. If the amount of insurance carried is less than required by this clause, any claim payment may be reduced by the same percentage as the deficiency. For example, covered property worth $100,000 may require a minimum of 80% or $80,000 of coverage for compliance with the policy's coinsurance requirement. If only $60,000 of coverage is carried (25% less than the required $80,000), then any loss payment would be reduced by 25%.

Comprehensive Perils Coverage
This coverage will protect your covered property against direct loss arising from any cause not specifically excluded. The advantage of this form is that the insurance company must prove that a loss is specifically excluded in order to deny coverage under the policy.

Condominium Contents Coverage
This coverage is used to extend your Condominium policy to insure those listed property items that are used, but not owned, by your association. It is needed because your by-laws do not clearly detail who is responsible for insuring such property. Normally, this property is covered under the member's own personal policy.

Deductible
A policy may include a deductible in its provisions. This limit specifies the amount that will be deducted from any payment made to you because of a covered loss.

Earthquake Coverage
This coverage will provide protection against loss do to earth movement including earthquake shocks and volcanic eruption.

Furs and Jewelry Coverage
This endorsement is used to provide extended coverage for jewelry, furs, watches and precious stones as outlined in the form. Limited protection is provided in the Property policy, but the additional coverage is needed since the value of these items can be of significant amounts.

Household Personal Property
Coverage for your household property is provided as a percentage of the limit of your residential dwelling amount. Additional coverage is available to increase this amount, if necessary.

Improvements and Betterments
This provision is used to extend your Property insurance to include coverage for the loss of use of alterations or additions that you have made in the building you rent of lease. This is important since these improvements become the property of the building owner and you will not be compensated for their loss of use after damage unless you have this coverage.

Inflation Protection
This coverage is used to automatically increase the limits of insurance on your covered property by a predetermined amount. Its purpose is to eliminate the risk that inflation will lead to coinsurance penalties and underinsurance.

Loss Assessment Fees
This coverage is designed to handle fees incurred by loss assessment against members of the condominium association after a loss. The endorsement can cover this additional cost under the association's policy rather than by assessing each individual member.

Market Value Valuation
This loss settlement clause is used for goods or commodities that are traded on established market exchanges. It obligates your carrier to adjust losses to such property based on the current market prices posted on the date of loss.

Named Perils Coverage
This coverage will protect your covered property against direct loss arising from one of the perils listing in your policy. To recover, you must prove that the loss was caused by one of these listed perils.

Office Equipment Floater
This policy will cover office contents for specified limits while at covered locations, in transit and temporarily off premises. Tenant's improvements and betterments can also be included as covered items.

Property Off-Premises
This provision is used to extend the personal property coverage to include limited protection for property while temporarily located away from the covered premises. Please note that it does not cover these items while they are in-transit, at a fair or exhibition or in the care, custody or control of a salesperson. Separate insurance must be purchased for these exposures.

Replacement Cost
This loss valuation method pays for the cost to repair or replace damaged items with like kind and quality without deduction for depreciation. This is important since you could face a substantial loss if you must replace property at today's prices but receive only the depreciated value of the property that was destroyed.

Replacement Cost on Personal Property
This coverage will allow you to replace all items destroyed by a covered peril without deduction for depreciation as long as the property is replaced by like kind and quality.

Stated Amount Valuation
This endorsement is used to protect you against being considered a coinsurer is a loss occurs. With it, your company agrees that the amount of coverage purchased is adequate and any coinsurance requirements are waived for a specific period of time.

Back

LIFE INSURANCE

Death Benefit
Provides income tax-free money to your named beneficiary that can be used to pay funeral expenses, debt, tuition, estate taxes or virtually any financial need you leave behind. It can provide business security by enabling partners to buy out the interests of a deceased partner and prevent a forced liquidation.

Living Benefit
The cash value growth of a permanent life insurance policy is tax-deferred, which means you do not pay taxes on the growth of the cash value unless the money is withdrawn. Loans or withdrawals can be taken against the cash value of a permanent life insurance

Term Life Insurance
Term provides life insurance protection for a specified period of time. If you do not currently have life insurance, term can be a good place to start. It's generally less expensive than permanent life insurance, and is available in varying term periods with fixed premiums from a one- (annual renewable term) to 20-year period (level term). Furthermore, term insurance is sometimes convertible to permanent coverage, providing you with flexibility as your needs change.

Whole Life Insurance
Whole life is a form of permanent life insurance that remains in force during the insured person's lifetime, provided premiums are paid as specified in the policy. Whole life insurance can build cash value.

Universal Life Insurance
Universal life is a form of permanent life insurance characterized by its flexible premiums, flexible face amounts and unbundled pricing structure. Universal life can build cash value, which earns an interest rate that may adjust periodically, but is usually guaranteed not to fall below a certain percentage.

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