Insurance glossary

A

Absolute liability

This means that the auto insurance company has to pay the innocent victims of an accident (up to a $200,000 limit) even if the at-fault driver that they insure has violated the terms of the policy (e.g. by driving with an expired license or lying about a ticket to get a lower premium).

Accident

In the context of auto insurance, an accident means a collision between two or more vehicles, or between a vehicle and other objects, that results in injuries or damage to property.

Accident benefits

Statutory accidents benefits is mandatory coverage for auto insurance in Ontario. It covers medical costs and rehab, loss of income due to disability or death, and funeral expenses. Learn more

Accident forgiveness

An “accident forgiveness” program keeps your driving record intact even after your first at fault accident.

Acts of God

The expression Act of God is often used to describe a natural event that causes damage such as forest fires, earthquakes, tornadoes, landslides, etc. In Canada, insurance companies do not use the term ‘Act of God’, but instead say peril. (See Named Perils coverage)

Actual cash value (ACV)

This is the amount that most vehicles and most personal belongings in your home are insured for, and represents what that item would likely be worth on the open market (kijiji, auto trader etc.) immediately prior to a loss. As an equation, ACV = Purchase price – depreciation.

This is different from replacement cost, which is the price you would pay to buy a brand new car (or other personal item) of the same or similar type. For an additional premium, most insurers will allow you to insure your car or home contents for replacement cost. In the case of auto insurance, replacement cost coverage will likely only be available if the car is less than 4 or 5 years old.

Actuary/Actuarial

An actuary is a certified professional who works for an insurance company and uses her/his specialized knowledge of math and probability to examine statistical data and use that data set rates for particular types of risk.

Additional insured

An additional insured is a person who is covered under an insurance policy, but is not the main person named on the policy (the named insured). So, for example, if Mary buys an auto insurance policy for her Ford F-150, she would be the named insured. Her son Ryan might be added as an occasional driver. He would be an additional insured. Mary’s partner Alex, who is not named in the policy but might drive the truck from time to time, is also an additional insured.

Additional living expense insurance

When you can’t stay in your home because it’s been damaged by something covered under your policy (insured peril), like a fire or a storm, additional living expense insurance can help with costs like hotel, food etc. while your home is being repaired. This coverage is part of most home, condo and tenant policies and will pay for accommodations, food etc. that is similar to what you are accustomed to. In other words, it won’t pay for a 5-star hotel.

Adjuster

An insurance adjuster can work directly for an insurance company or can be an independent contractor/firm working for an insurance company. This person/firm assesses your claim and the supporting documentation, and determines the final amount payable by the insurer.

Agent (insurance)

An insurance agent (also called a captive agent) represents only one insurance company and therefore can only offer the insurance products of that one company.

All perils or all risk coverage (auto)

All Risk auto coverage combines collision and comprehensive coverages. In addition, it covers loss or damage caused if a person who lives in your home steals the vehicle that is covered by your policy. Learn more

All perils or all risk coverage (home)

Provides broader coverage for normal risks to your home, except those that are specifically excluded, such as acts of terrorism or flooding.

Applicant/Application

You don’t actually buy insurance. You apply for insurance, and the insurance company then decides whether or not they want you as a customer. All the information you give your broker over the phone, in person or online is used to fill in the application, which is then submitted to the insurance company. When you apply for insurance, before the company accepts you, you are the applicant.

Appraisal/Appraiser

An estimate of the value of a piece of property, whether it be a house, a car or a piece of jewellery. An appraisal can be done prior to getting insurance (for jewellery, classic cars etc.), or sometimes it can be part of the claims settlement process. An appraiser must be an expert in that type of property.

At fault accident

When you are found to be the cause or at fault, fully or partially, for an accident.

Arbitration/Arbitrator

Arbitration is an alternative way to settle a dispute with your insurer. Both sides have to agree on an arbitrator, who reviews both of your positions and supporting documentation, and decides on a fair outcome. Some insurance policies include an arbitration clause that specifies when and how arbitration is to be used.

Arrears

If you do not pay your monthly premium by the due date, you are in arrears. The outstanding amount that is overdue can also be called arrears.

Arson

When someone sets a house or building on fire on purpose, it’s called arson. This is a serious crime that can land you in jail. Insurance policies generally exclude arson, meaning that if you set your house on fire on purpose to collect the insurance money, you’ll be waiting a while, but at least you’ll have a nice warm jail cell to wait in.

Assumption of risk, or assumption of liability

This is what an insurance company does when they sell you a policy. They assume your risk, or they assume your liability, meaning that they take on responsibility for that risk/liability, and agree to pay some or all of your costs if that risk leads to a loss on your part.

Assurance/Assurer

Same as Insurance/Insurer

B

Bad faith

Bad faith can describe an insurer that knowingly tries to avoid paying a legitimate claim or a claimant or policyholder that knowingly lies to his/her insurance company to secure a lower rate or collect on a fraudulent or inflated claim.

Basic insurance policy

See Named Perils

Betterments

When an insurance policy refers to betterments, this means improvements to a property beyond maintenance or repairs. Usually betterments would increase the value of the property.

Binder/bound

A binder is a temporary form of insurance that provides coverage until a proper policy can be finalized. This is why you’re able to call your broker from a dealership and drive a new car off the lot the same day. The policy won’t yet be in place, but you will be covered under a binder. When you are insured under a binder, it can be said that coverage is bound.

Blue book value

Essentially the same thing as ACV. The Kelley Blue Book is a trusted publication that publishes the current approximate values of every vehicle you can imagine. If you have a total loss, your insurance payout is likely to be right around the blue book value of the car before the accident.

Bodily injury

An insurance term that describes physical injuries (including death) suffered as the result of a car accident or other mishap, perhaps on a worksite or at your home. This term is used in reference to liability insurance, which is part of home, auto and business insurance, and is available to pay victims on your behalf if your actions lead to their injuries.

In Ontario, if you’re injured in a car accident, your own Accident Benefits coverage would pay up to a certain amount for rehab, lost wages etc. If those benefits run out, you would have to go after the at-fault driver for Bodily Injury benefits.

Boiler and machinery insurance

This coverage can be added to a business (commercial) insurance policy, and protects the business if it suffers a breakdown in its heating, air conditioning, refrigeration or related equipment.

Branding

A car can be “branded” after an accident or when it’s been stolen to let police and potential buyers know its status, as follows:

• Salvage – This means the vehicle has sustained damage that makes it unsafe to drive, and that would cost more to fix than the value of the vehicle itself. A vehicle branded salvage is not legal to drive, but if the necessary repairs are made, you can apply to have the vehicle rebranded as “rebuilt”.
• Rebuilt – This means the vehicle was severely damaged, but has been repaired to make it safe for the road.
  Irreparable – This means the vehicle has sustained damage that makes it unsafe to drive, and the damage cannot be repaired. A vehicle branded irreparable will never be legal for the road, and can only be used for parts.
• Stolen – This means the vehicle has been stolen, and only the police can remove this brand once the stolen vehicle is returned.

Breach

A breach is a failure on the part of either the insurer or the policyholder to live up to the terms and conditions in the insurance policy. For example, failing to notify your auto insurer when you’ve been in an accident.

Broad coverage (business insurance)

This is a way to describe a business insurance policy that includes comprehensive coverage for buildings, along with named perils coverage for stuff like chairs, desks, computers and other business supplies that are kept in the building.

Broker (insurance)

An insurance broker is usually employed by an insurance brokerage that can offer the various insurance products of many different insurance companies.

Builders risk insurance

This coverage protects a property while it is under construction/renovation, including damage to temporary buildings, theft of building materials etc. It is usually purchased by a builder, but can also be purchased by a homeowner managing their own construction or major renovation project.

Business income insurance/Business interruption insurance (business insurance)

Business income insurance (also known as business interruption insurance) provides coverage for business income lost as a result of property damage, vandalism, theft, or any other covered reason that prevents a business from carrying on its usual activities for a period of time, usually while repairs are being completed.

Business insurance/commercial insurance

Insurance purchased by a business. Can include several types of liability insurance, property and contents insurance, business interruption insurance, commercial auto insurance, cyber insurance, and more.

Buy back deductible

A deductible that can be removed by paying extra premium.

By-law endorsement

For an additional premium, most insurers will sell you a by-law endorsement that provides additional coverage if local by-laws make it more expensive than normal to repair or rebuild your property after a loss.

C

Captive agent

See Agent (Insurance)

Captive insurance company

This is an insurance company that is owned in its entirety, or to a large degree, by one or more non-insurance entities such as municipalities for the purpose of providing insurance coverage to the owners themselves. It is basically a form of self-insurance.

Casualty/casualty insurance

A casualty is someone or something that is hurt, damaged, or killed in an accident. Casualty insurance can also be called liability insurance, and refers to insurance that protects you from liability for losses to third parties.

Certificate of insurance

Usually refers to business (commercial) insurance. A business can ask their insurer to provide a certificate of insurance as proof of coverage, that they can then show their clients. The certificate includes general information regarding the coverage.

Chartered insurance broker

A C.I.B. is an insurance broker who has been given this designation after passing a series of exams, essays and questionnaires, and who has made a commitment to professional standards. To qualify, the broker must have worked in the insurance industry for at least 5 years.

Civil commotion

Refers to disturbances involving large groups of people, commonly known as riots. Both home insurance and commercial property insurance cover most damages that result from rioters’ behaviour, such as vandalism and looting.

Claim/claimant

A claim is made when you report a loss to your insurance company due to a car accident, for example, or due to a theft in your home. A claim can result in a payment from the insurance company, but it can also be denied if the insurer determines that the loss is not covered under the policy.

A claimant is anyone who makes an insurance claim. Usually the policyholder, but not always.

Claims cost

When insurers talk about claims costs, this typically refers to the actual money paid out to settle claims, plus costs associated with adjusting the claim.

CLEAR (Canadian Loss Experience Automobile Rating)

This is the way that different models of cars are classified for insurance purposes. A rating from 1 to 60 is assigned based on all claims submitted for a particular make and model of vehicle, including the simplest fender bender. The higher the rating, the higher the premiums will be for that type of vehicle.

Collision reporting centre

In many urban areas in Ontario, if you get in a minor car accident and police are not needed at the scene, you can report the accident at a Collision Reporting Centre within 24 hours.. However, if the combined damage to all vehicles is over $1,000 (which is most accidents these days) or if there are injuries, you are obliged by law to call the police and wait for them to arrive at the scene of the accident.

Collision coverage

Collision & Upset is optional in an auto insurance policy to help you pay to get your vehicle repaired after an accident. If you’re at fault, if it’s a single vehicle accident, or if you’re the victim of a hit-and-run, you’ll need this coverage to get your repairs covered. Learn more

Commercial (business) auto insurance

Commercial auto insurance protects vehicles being used for business purposes, including company cars, trucks, and shipping vehicles. It is particularly important to have when using personal or rented vehicles for business tasks. Many business insurance policies include something called non-owned automobile coverage for this purpose.

Commercial general liability insurance (CGL)

CGL policies protect you and your business from lawsuits brought on by clients and other third parties as a result of bodily injury, advertising injury or property damage. If you operate out of a rented space, it also includes tenant’s legal liability coverage that protects your business financially if you or one of your employees accidentally cause damage to the space.

Commercial host liability (for the selling of liquor)

A bar or restaurant owner can be held liable for injuries and damage caused by a drunken patron both on the premises and beyond, especially if that patron operates a motor vehicle and ends up injuring or killing other drivers, passengers and/or pedestrians. Injured parties can sue not only the driver, but in many cases the businesses where the driver became intoxicated. Such cases hinge on whether the bar owner or employee should have been aware of the customer’s level of intoxication, and whether best practices were followed in terms of continuing to serve alcohol to an intoxicated patron. This kind of policy protects against these lawsuits, paying any award or settlement, as well as legal fees.

Commercial insurance

See Business Insurance

Commercial property floater

An addition to a policy that ensures certain valuables are covered if a business regularly moves equipment to different sites. For example, construction contractors need to protect such moveable assets as cranes and bulldozers from hazards like weather and vandalism. Moreover, some nomadic organizations, such as carnivals and fairs, would need this coverage  as they move from place to place.

Commercial property policy

A standard insurance policy for businesses and other organizations that covers damage to buildings owned by the business, and their contents, resulting from fire, burst pipes, storms, theft and vandalism. It may also cover the subsequent business disruption costs, such as rent and lost income.

Comprehensive coverage

Comprehensive auto insurance is optional in an auto policy to cover you when your vehicle is damaged by something other than an accident, such as theft, vandalism, flying debris, etc. Learn more

Comprehensive general liability policy

See Commercial General Liability Insurance

Comprehensive personal liability policy

This is liability insurance for individuals, which is typically included in a homeowners, condo or tenants insurance policy. It covers legal costs and any compensation awarded to another person arising from damage and/or injuries you have caused. Though this kind of policy covers almost any activity you are involved in, it does not protect you from lawsuits resulting from automobile accidents or business operations.

Compulsory insurance

Any insurance required by law. In Ontario, for example, your auto insurance policy must include Third Party Liability Coverage, Accident Benefits coverage, Uninsured Automobile coverage, and Direct Compensation-Property Damage coverage.

Concealment

Concealment is failing to provide any pertinent information relating to an insurance contract, even if the insurance company does not ask a direct question. If you are found to have concealed information that would have altered the terms of a contract, such as a past smoking habit or previous traffic violations, your insurance provider may refuse to pay out on any claims related to information you have neglected to provide.

Consequential loss

A consequential loss is a loss that is not the direct result of an insured peril, but that is a consequence or outcome of that insured peril. For example, if an explosion damages your roof and lets rain into your home, any resulting water damage is a consequential loss. The water damage was not directly caused by the explosion, but it was a consequence. Many consequential losses are covered.

Contingent liability

In business (commercial) insurance, this is legal responsibility for damage, injuries or other losses that results not from the actions of your business, but those of subcontractors.

Coverage

Coverage essentially means the same thing as insurance. The parameters of your coverage (what is covered, to what extent, and for what perils) are defined by the wording, exclusions and limits in your insurance policy.

D

Death benefit

The payout to a beneficiary of a life insurance policy Or in Ontario, when someone is killed in a car accident, their Accident Benefits coverage will pay a set death benefit to the victim’s spouse and dependants.

Debris removal

This is a part of a property insurance policy which provides reimbursement for costs associated with cleaning up the debris after a property has incurred massive damage. Debris could be in the form of fallen trees or twisted rebar and can be tricky, and costly, to remove.

Deductible

The portion of a loss that you are required to pay. You can lower your monthly premiums if you are willing to have a higher deductible; that is, pay a higher amount of the loss should a loss or claim occur.

Demolition insurance

Usually included in a home or other property policy, this covers the costs related to tearing down of a building that is damaged beyond repair. It also covers injuries and property damage incurred during the demolition process.

Depreciation

The decline in value of property over time, through use and general wear and tear.

Direct compensation – property damage (DCPD)

This is compulsory auto insurance coverage in Ontario and other provinces, whereby your own insurer pays to repair or replace your vehicle after an accident where someone else is at fault. Without this coverage, you would need to sue the at-fault driver.

Directors and officers liability insurance (D&O)

Insurance for members of boards of directors (of corporations, non-profits etc.). Often when a business or other organization is sued, the board and/or individual board members that direct the organization may also be named in the lawsuit, if it is alleged that they made errors or failed to take precautions that could have prevented a loss.

Direct writer

An insurance company that sells its own insurance products directly to the public, usually online.

Disappearing deductible

A type of formula-based deductible that is reduced as the cost of the damage increases, disappearing completely when the loss reaches a specified amount. It also refers to a type of deductible that decreases over time if you do not make a claim during that period.

Disclaimer

Usually found at the beginning or end of an insurance policy, a disclaimer is a statement or warning about some aspect of the coverage in question, typically meant to limit or deny coverage under certain conditions.

Duty of care

This refers to the standard obligation in all insurance policies that you, as the insured, will take “reasonable care” of your insured property and take reasonable precautions prevent losses that could lead to a claim. In other words, not being irresponsible just because you are insured.

Dwelling coverage

This refers to the part of your home insurance policy that covers your home’s actual structure, as opposed to its contents or the land it sits upon. It covers the costs related to rebuilding or repairing your home after it sustainsdamage from an insured peril. Coverage includes installed fixtures and permanently attached appliances.

E

Earthquake insurance

This kind of coverage, for loss and damage to property and its contents due to earthquakes, is not usually part of a home insurance policy. It can be added on to your policy, albeit with a higher deductible than for other perils. While not as frequent in Canada as other natural disasters, earthquakes in some parts of the country can do significant damage to property. Learn more

Easement

This is basically a right-of-way over another person’s land. If a public path to a lake, or similar type of access, has run unimpeded through your land for ten years or more, for example, this is what’s known as an easement, and can have influence on your insurance costs.

Effective date

This is quite simply the date on which your policy takes effect, and from which protection is provided.

Employment practices liability

Employment practices liability protects against issues that may arise in employee management, including hiring and termination, and daily management, and encompasses issues like wrongful termination, discrimination, and sexual harassment.

Endorsement

An amendment to an insurance policy, agreed to by both parties, that changes certain provisions of the policy.

Equipment

Equipment is an extremely confusing term in insurance because it can mean very different things depending on how it is used.

In the context of auto insurance, equipment is anything that is part of the car, including four tires, automatic windows etc., but not including trailers or after-market storage units connected to the car.

When it comes to business insurance, insurance providers offer what they might call tools and equipment insurance, which would cover all the tools and equipment required in a given trade. However, construction equipment like bulldozers and excavators would not be covered under a tools and equipment policy. For these, you’d need what is called heavy equipment insurance.

We’re almost done…

Lastly, equipment breakdown insurance, also known as boiler and machinery, covers electrical and mechanical equipment in your building (air conditioning, computers, copiers, freezers, security and phone systems) in the event that it breaks down due to an electrical short, power surge etc.

Equivalent materials

If the materials and equipment stipulated in a contract with a contractor become unavailable, equivalent materials can be substituted as long as the contractor has provided sufficient proof to the engineer that the new materials are equal to or better than those originally agreed upon.

Errors and omissions insurance (E&O)

Errors and Omissions, or E&O, covers you against professional errors or negligence should you be found accountable in the event of your client’s financial loss.Learn more

See also Professional liability insurance.

Excess insurance

Excess Insurance provides coverage above the limits of the underlying policy. It is similar to umbrella policies in that it safeguards against catastrophic claims and losses that were unforeseen, yet is different in that it does not broaden the scope, or expand the terms, of that underlying policy.

Exclusions and exceptions

Exclusions are situations or property not covered by a standard policy. Even with an All Risk policy, not all perils are insured against. For example, earthquakes, coastal flooding and other natural disasters, as well as acts of war and terrorism, are regularly excluded. Learn more about home insurance exclusions.

Exceptions are provisions that put some of those excluded items back into coverage. They are exceptions to an exclusion, not exceptions to coverage.

Employment practices liability

Employment practices liability protects against issues that may arise in employee management, including hiring and termination, and daily management, and encompasses issues like wrongful termination, discrimination, and sexual harassment.

Errors and omissions

Errors and Omissions, or E&O, covers you against professional errors or negligence should you be found accountable in the event of your client’s financial loss. Learn more

Exclusions

These are situations or property not covered by a standard policy. Even with an All Risk policy, not all perils are insured against.

F

Facility Association

This is an organisation set up by the automobile insurance industry to ensure that anyone who is required to have car insurance has access to it. Due to the competitive market, it is sometimes difficult in some locations for high risk drivers to obtain car insurance from an individual insurance company. It is the objective of the Association to provide car insurance to those drivers who would not otherwise be able to obtain it. Every insurer licensed to provide automobile insurance in Ontario must become a member of this association, and pay a share of the related costs. Learn more.

Facility of payment clause

Sometimes added to a life insurance policy to ease the legal expenses of an estate, this clause allows the insurance company to choose the beneficiary if, for example, the beneficiary is a minor or is deceased, or to give part of the payout to someone other than the beneficiary, such as to a funeral home for the policy holder’s burial services.

Fault determination rules

This is a regulation in Ontario used to judge driver responsibility after car accidents. A percentage of blame is assigned to each driver involved in the accident based upon these rules, without regard to weather conditions, road conditions or the actions of pedestrians.

How fault is broken down determines which part of your insurance policy is on the hook for damage to your vehicle. If you are zero percent at fault, your damage is paid for through Direct Compensation – Property Damage (DCPD), which is a standard coverage in Ontario. If you are at fault, the percentage of fault will determine the percentage of damage paid for by DCPD. So if you are 50% at fault, DCPD will pay for 50% of your damage. The remainder would be covered by your Collision coverage, if you opted for it. Otherwise, it is not covered.

Ultimately, any accident in which you are assigned 25% fault or more counts as an at-fault accident on your insurance record.

Fire insurance

Coverage for damage caused by fire and lighting strikes, as well as water damage related to putting out the fire. It is included in most standard property insurance policies.Learn more.

Fixtures

A fixture is any item that has been permanently attached to a property and is then considered a part of that property. Some examples of fixtures are chandeliers, built-in bookcases and cupboards, fitted kitchens, shutters and drapery rods. These would be covered under your home insurance policy.

Fleet insurance

If your business has five or more cars or trucks, you may be eligible for fleet insurance. It covers all your vehicles, saving you money on having each of them insured individually. Learn more.

Floater

In home insurance, a floater is additional coverage for moveable objects like jewelery or electronics that are not fully covered under a typical home insurance policy. A typical floater provides coverage for a specific item, such as expensive stereo equipment, furs or collectibles.

Fraudulent misrepresentation

A deliberately false statement made with the intention of getting cheaper insurance or claiming a loss that wouldn’t otherwise be covered. Learn more.

G

General insurance ombudservice

An independent organisation of impartial professionals established to help Canadian policyholders resolve disputes or concerns with their insurers in a fair and reasonable way. They mostly deal with issues regarding claims, interpretation of policy coverage, as well as the processing and handling of those policies.

Grace period

The amount of time after which a premium is due when it can be paid without incurring a penalty or losing coverage. It can vary depending on the policy.

Graduated driver’s licensing

The process by which new drivers obtain a licence in Ontario. As the new driver goes through the process, more driving privileges are granted as experience is gained. It is a way of mitigating the risks involved in insuring young and inexperienced drivers. Learn more.

Gross negligence

A willful disregard of the need to use reasonable care. As an example, ordinary negligence can be something like causing an accident by running a stop sign, whereas the driver could be accused of gross negligence if they sped up before going through that stop sign.

Group plan

Group plans provide extended health and drug coverage to employees and members of large companies and organisations. These plans can be designed to meet the specific needs of a particular group at a lower cost than insuring each individual separately. You usually need to have 100 or more people to qualify for a group plan. Learn more.

H

Habitational insurance

Habitational insurance is for people or companies that own property/buildings.

Hard market

For the purposes of an insurance consumer, a hard market basically means that insurance premiums are going up and it may be more difficult for some people to find the coverage they need. For insurers, it means they may be losing money or at least earning a lower return on investment. This makes it harder to attract capital, and reduces the amount of insurance a given company can write.

A hard market lasts as long as it takes insurers to become profitable again, sometimes 2 or 3 years, by either reducing costs, increasing premiums, or often both. When insurers across Canada are making profits below 7%, it can be said that we are in a hard market.

Hazard

A hazard is something that makes it more likely that a loss will occur. For example, if you have home insurance and you don’t shovel your walkway after a snow storm, that’s a hazard. It increases the chances of a slip and fall accident that could lead to a lawsuit, and a liability claim.

High-risk driver/High-risk insurer

Drivers who have had a number of convictions or at-fault accidents, had policies cancelled because they haven’t paid their premiums, or have other risk-related characteristics, are considered high-risk drivers, and may not be able to get auto insurance from the regular insurance market. High-risk insurers specialize in this kind of driver, but typically charge much higher premiums than the regular market. Learn more.

High-value insurance

High value homeowner’s insurance offers more coverage and higher limits to protect those with more material wealth than average, whether it is the home itself and/or high-value collectibles or jewelry.

Highway Traffic Act

The Highway Traffic Act (HTA) in Ontario is the law that governs the behaviour of road users, whether they are on a highway or a city street. It relates to insurance in that a breach of the HTA (speeding, for example) is grounds for an insurance company to charge a higher premium, or in some cases, deny insurance altogether.

Hit and run

This is the laymen’s term used to describe a traffic accident where one of the drivers leaves the scene of the accident without waiting for the police or providing identification to the other parties involved. This is an offence in Ontario under the Highway Traffic Act, often called “Failure to remain at the scene of an accident” or simply “Fail to remain”.

Hold harmless clause

A clause in a contract in which one party assumes liabilities that otherwise might fall to someone else. Most common in construction, where a contractor may take legal responsibility for a client, or a subcontractor may take on liability of the general contractor. For example, a sub-contractor may take on the liability that would usually belong to the general contractor if a client gets hurt on a work site.

If you are a contractor with a business insurance policy, note that your insurance may not cover you for the risk you are taking on with a hold harmless clause. Speak to your broker before entering into any such agreement.

I

Immobilizer

An immobilizer is an anti-theft device that prevents a vehicle engine from starting unless a key or other owner authentication mechanism is present. (Some cars now have push-button start using a FOB, or even driver fingerprint authentication). Essentially, it prevents thieves from bypassing the starting mechanism, or “hotwiring” the car to start it.

Improvements and betterments

These are improvements that you may have made to your condominium over and above the definition of a standard unit as defined in your condo association bylaws.

Income replacement benefits

If you cannot work as the result of an automobile accident, your basic Ontario auto insurance policy will replace 70% of your gross income up to $400 a week. You can also pay to increase this limit to $600, $800 or $1,000. This benefit is part of your accident benefits.

Insurance

Insurance is a contract in which the insurer agrees to compensate the insured for specific losses and specific perils.

Insured

The insureds are the people protected by an insurance policy. Usually including the policyholder, and possibly family members in the case of auto or home insurance.

Insured peril

In an insurance policy, some perils are excluded. An insured peril is any peril that is not excluded. Hence, if you suffer a loss because of that peril, it should be covered.

Insurer

The insurance company who is responsible for paying in the event of an insured loss.

Inception

Inception is the point in time when an insurance policy takes effect.

Indemnify/Indemnity

When an insurance company indemnifies someone, they are reimbursing them for losses they have sustained. Indemnity is the end result of a successful insurance claim.

Indirect or consequential loss (or damage)

A loss that is not caused directly by an insured peril, but that still may be covered. For example, if you are a landlord and a fire causes you to lose rental income, that loss is not directly caused by the fire (the insured peril), but the lost rent would typically be covered as an indirect loss.

In force

An insurance policy is in force from its inception until its expiry or cancellation. It means that the insurance contract is currently in effect.

Inland marine insurance

Inland marine insurance has nothing to do with water. It is coverage for items while they are in transit. The term evolved from marine insurance that covered items being shipped by boat overseas.

Insurable interest

Having an insurable interest in something means that if an insured loss were to happen, you would be affected by it. To insure an item, you need to have an insurable interest in that item. Basically that means you can’t get insurance for something you don’t own or have a direct relationship to. So you can’t buy insurance on your neighbour’s Ferrari.

Irreparable

If your car suffers structural damage in an accident, the repair shop or insurance company may brand it “irreparable”. That means it’s not legal for the road and cannot be repaired to make it legal. The brand is tied to the vehicle’s VIN, and anyone looking to buy it or get insurance for it will see that it is irreparable. This vehicle can only be used as scrap metal or for spare parts.

J

Joint and Several Liability Clause

This clause exists in many contracts, and basically allows a wronged party or claimant to sue a whole bunch of partially responsible parties, each for the maximum amount payable. If one of the responsible parties is broke and doesn’t have enough insurance, the wronged party can still recover the maximum amount from those that have the ability to pay.

So under a joint and several liability clause, if you suffer a major injury at a rock concert, you can sue the band that was playing, the venue, the ticket seller, the company that built the stage, maybe even your fellow concert-goers. If the band and venue go bankrupt and have no insurance, you can still recover the maximum amount from the other responsible parties, even if they were only deemed to be 5% liable for your injuries.

Jurisprudence

Also called common law, jurisprudence refers to previous decisions made in legal cases similar to yours. As pertains to auto and home insurance (specifically liability coverage), previous court awards can affect future court awards, and thus can dramatically affect insurance pricing.

K

Key Person Insurance (Business Insurance)

Once known as key man insurance, this is a life insurance policy taken out by a company on an executive or employee that is deemed so essential to the company, that the loss of that person would lead to financial losses for the company.

Known Loss

Every insurance policy has a known loss clause stating that you cannot insure a loss that already happened, or that you were already aware of, at the time you purchased the policy. It may seem obvious, but if you try to buy home insurance as your house is already on fire, the insurance company is not obligated to pay you for that loss.

L

Lapse

An insurance policy lapses when it reaches its expiry date, it is not renewed, and the policyholder does not immediately buy insurance with another company. If you allow your auto insurance policy to lapse, you may be driving illegally. Lapses in insurance show up in your insurance history and can cause some insurers to not want your business.

Legal expense insurance

This is a type of optional coverage that is most often part of a business insurance policy but can be also purchased as a rider on your home insurance A standard business or home insurance policy includes liability coverage that will pay your legal fees if the business gets sued, but legal expense insurance gives you additional access to legal advice if you need it, and pays your legal bills if you or your business have to sue someone else. Learn more.

Liability

A liability is something you are legally responsible for or liable for; in business, debts or monies owing are commonly known as liabilities. Liability insurance covers you in situations where you are found responsible for bodily injury or property damage.

Libel

If you write or publish something that leads to reputational harm to a business or individual, they can sue you for libel, which you would be covered for personally if you have a home or tenants policy that includes liability coverage. Your business is likely covered for libel under an “advertising injury” endorsement that is part of most Commercial General Liability policies.

Licensed

In Ontario, only a RIBO-licensed broker, agent or insurance company is authorized to sell insurance. (See RIBO below for more information.)

Life insurance

Simply put, a life insurance policy pays your beneficiary a cash payment when you die. The amount of money depends on what you are insured for and the type of policy that you buy. (See Term Life Insurance and Universal Life Insurance for more information.) Learn more.

Limit/sub-limit

Usually refers to the highest dollar amount available to you when an eligible claim is made. There can be a limit for the entire policy, and sub-limits for specific items. For example, your home insurance policy has an absolute limit that is equivalent to the cost of rebuilding your home from scratch, but it also has sub-limits for items like jewelry. So if your limit is $250,000 and you have a break-in, you may only be able to recover $1,000 for stolen jewelry, even if you can prove that the lost jewelry was worth much more.

Lien

A lien is a legal claim on a piece of property, usually as the result of the property owner owing money. Basically, if someone has a lien on your house, it means that if you sell your house, they are entitled to a portion of the proceeds of the sale. A mortgage is the most common type of lien. The bank lends you money, and in return, not only do you pay interest, but the contract stipulates that if you sell the house, you have to pay the bank back.

When you insure a property, the insurer needs to know about any liens on the property, because lien holders are also named in the policy. Essentially this is how the bank makes sure that if your house burns down, they get their money back.

Like kind and quality

This is a phrase that is used in insurance when talking about replacing property that’s damaged, destroyed or stolen. For example, in auto insurance, if your 2010 Ford Escape gets totaled in an accident, the insurance company is responsible for paying to replace it with another vehicle of like kind and quality. Meaning another 2010 Ford Escape with similar features and mileage, and in similar condition to the one you lost, just before you lost it.

Limitation period

This is how long you have to file a claim after an accident. For most claims, you are required to file “within a reasonable time”, which can vary depending on the circumstances. If you decide to sue an at-fault driver for injuries or other losses you sustained in an accident, the limitation period is two years.

Line/Line of business

In insurance speak, a line is a type of insurance. So auto insurance is a line, home insurance is a line, business insurance is a line, motorcycle etc. Most insurance companies offer a multi-line discount, meaning if you get more than one type of insurance with them, you can save 10-15%.

Insurance folks also talk in terms of personal lines (home, auto, motorcycle etc.) and commercial lines (all the different kinds of insurance for businesses).

Loss

A loss is an event that leads to an insurance claim. A fire, a car accident, a slip and fall. All are examples of losses.

Loss of use insurance

Loss of use insurance is a type of coverage that compensates the policyholder for the additional costs incurred while they are unable to use their insured property after a loss. In home insurance, this is called “additional living expenses” coverage, and pays for hotels and meals if a fire or other loss makes your own home unsafe to be in. In auto insurance, it’s actually called “loss of use”, and pays for a rental car while your own vehicle is being repaired after an accident.

M

Malpractice insurance (business insurance)

Malpractice insurance is a type of professional liability insurance for doctors and other medical professionals. It differs from commercial general liability (CGL) insurance in that CGL covers you for losses arising from the daily operations of your clinic, while malpractice insurance covers losses arising out of mistakes or omissions you make as a doctor. For example, if you prescribe a patient with heart disease a medication that is known to exacerbate heart problems, and the patient gets worse or dies, the family could sue for malpractice, and your malpractice insurance would pay any court award or settlement, plus legal fees.

Medical, rehabilitation and attendant care benefits

Part of your accident benefits. You can buy optional additional coverage over and above the current standard maximum amounts included in a standard auto policy.

Moral hazard

In insurance, a moral hazard is something that makes the insured more likely to make a claim. For example, a home inspection may show that the house has become a “hoarder” house and that makes the likelyhood of a claim higher.

Mortgage insurance

An insurance policy sold by a lender (e.g., a bank) that pays the balance of your mortgage back to the lender if you die, thus protecting your loved ones from having to carry your debt for you. A better and less expensive way to achieve the same goal is to talk to a licensed life insurance broker about completing a needs analysis and possibly buying life insurance in the amount that you owe.

Misrepresentation/material misrepresentation

One of the reasons that your insurance company can legally void your insurance policy is if they have evidence of material misrepresentation on your part. Essentially, it means that you lied on your application or when talking to your broker. The reason it’s referred to as “material” misrepresentation is that the lie has to be something that would make a difference in the insurance company’s decision to offer you coverage, and the premium they offer.

Mutual insurance company

A mutual insurance company is owned by the policyholders, who elect a board of directors to run the business. In Ontario, there is a long tradition of regional farm mutuals that resulted from local farmers getting together to share risk. Nowadays mutual insurance companies sell all kinds of insurance, and not just to farmers.

Mysterious disappearance

Most home insurance policies have a clause that includes “mysterious disappearance” as an insured peril. The reason this is important is because sometimes your $4,000 golf clubs just vanish, and you don’t know if they were stolen from your garage, or if you left them behind at the driving range. This clause means that you don’t have to prove that someone broke in to make a claim. Items such as jewelry have sub-limits for this type of loss.

N

Named perils coverage

In home insurance, a named perils policy provides coverage for specific basic perils outlined in the policy, and nothing else. This coverage is less expensive than an all perils or all risks policy, but places more risk of financial loss on you if you suffer a loss that isn’t covered.

No fault insurance

No fault insurance is a type of auto insurance system (in place in Ontario and many other jurisdictions) where  you deal with your own insurance company for most claims, regardless of whether you’re at fault for an accident or not. The other type of system that exists in some parts of the world is a tort system, where you have to sue the at-fault driver for any injuries or losses you sustain in an accident.

Contrary to what some people think, no fault insurance DOES NOT MEAN that it doesn’t matter who is at fault for an accident. Even in a no fault system, fault is determined in every accident, and the at-fault accident will affect the at-fault driver’s premiums for years to come. Learn more.

Non-owned automobile coverage (business insurance)

This coverage is common in business insurance policies, and it covers the business if an employee uses a vehicle that is not owned by the business for a business purpose. So for example, your boss may ask you to drop something at a client’s house on your way home. Technically, that’s business use of your personal vehicle, and wouldn’t be covered by your personal auto insurance policy if you got in an accident on the way. Non-owned auto coverage closes this gap. Learn more.

O

Occupancy clause

Occupancy is very important in home as well as business property insurance, because if a property is not occupied, the risk of suffering a loss goes way up. It’s more likely someone will break in; If there’s a fire, it will spread uncontrollably; if a pipe bursts, no one will be there to turn the water off. For this reason, most property policies, whether they be residential or commercial (business), have an occupancy clause that limits coverage if the property is unoccupied for more than 30 days at a time. Even less time during the heating season. Check your policy for the actual amount of time.

Optional coverage

Because certain auto insurance coverage is mandatory if you want to drive in Ontario, we often refer to optional coverages, meaning that they aren’t required by law. The most common examples of optional coverages are collision, which pays to repair or replace your car after an accident, and comprehensive, which pays to repair or replace your car if it’s stolen or vandalized.

P

Pain & suffering

Civil law in canada allows you to sue other people or corporations not only for monetary losses they may have caused you, but also for your pain & suffering. Over the years, there has been much discussion about pain & suffering awards, particularly in auto insurance cases, because pain & suffering can be difficult to prove, and the amounts awarded can put upward pressure on insurance rates. Auto insurance policies in Ontario have a deductible for this kind of claim ($39,754.31 for 2021).

Peril

A peril is a particular type of event that may cause a loss or damage. Fire and theft are examples of perils. See named perils coverage.

Permanent life insurance

A category of life insurance that provides lifelong coverage and premiums that never increase. Unlike term life insurance, permanent life insurance does not expire after a predetermined period of time. In addition to a death benefit, permanent life insurance also has a savings component, allowing you to cash in or borrow against its accumulated value. There are two main types of permanent life insurance: whole and universal life insurance.

Personal injury

Personal injury coverage protects not against physical injury but against libel, defamation, or slander for which you, your employees, or your company may be held accountable.

Personal lines/personal insurance

Personal lines of insurance are for individuals, and include home, auto and motorcycle insurance, to name a few. As distinguished from commercial lines of insurance, which are for businesses.

Physical damage coverage (automobile)

In auto insurance, physical damage coverage is insurance for actual damage to your vehicle, and includes collision or upset (for accidents) and comprehensive (for theft, vandalism and weather damage). Physical damage coverage is not mandatory in Ontario.

Policy/policyholder

An insurance policy is a contract of insurance between you (the policyholder) and the insurance company. You promise to pay your premiums, and they promise to pay you if certain events happen, like an accident, break-in or theft.

Product liability insurance (business insurance)

Product liability policies cover any damages that come from the use of your products by consumers, whether through manufacturing errors, faulty design, or safety flaws that can otherwise cause harm.

Premises liability (business insurance)

Premises liability insurance protects against accidents that happen on your property, like slips, falls, and broken bones, and can cover both employees and visitors.

Premiums

Premiums are the rates you pay, either monthly or annually, for your level of insurance coverage.

Professional liability (business insurance)

Also known as malpractice insurance (for doctors) or errors & omissions insurance, professional liability coverage protects you and your employees against errors and negligence that may occur in the process of delivering professional services or advice. Businesses that require unique professional knowledge and experience, like law firms, medical clinics and consulting firms, need professional liability coverage in addition to commercial general liability coverage.

Proof of loss

Whenever you file an insurance claim, the insurance company will expect you to present proof that the loss actually happened. You usually need to fill out a form and may need to provide receipts, photos and other documentation before the claim is processed and paid.

Property & casualty insurance

Also called p&c insurance or general insurance, this is the main type of insurance sold and serviced by Mitchienienienien. It includes home, car, motorcycle and cottage insurance, as well as business or commercial insurance. P&c insurance is distinct from life and health insurance, which includes employee benefit plans.

Property insurance

Protects home and property, or business assets and property, from perils such as fire, theft and accidental damage.

Pro rata cancellation

A pro rata cancellation is one where the policyholder gets back all their premiums for the unused portion of the policy. In simple terms, it means there’s no penalty or other fees applied. If your annual premium is $1,200 and you cancel after exactly one month, a pro rata cancellation would mean you get back $1,100.

Q

Quote

A quote is an estimate of how much your premium will be, based on information that you provide to your insurance representative. When shopping with a broker, you may be able to get as many as a dozen or more quotes at the same time, depending on the type of insurance, the specific item you’re insuring, your insurance history, and how many insurance companies the broker works with.

Remember that a quote is always an estimate. When you are ready to buy, the price may change if the information you provided doesn’t match your driving and/or insurance record.

R

Ratable

If an insurance representative talks about whether an accident is “ratable” or not, that means whether it is used to help determine your premium. Generally, only at-fault accidents are ratable in Ontario.

Rate

Rate is sometimes used interchangeably with “premium”. It’s the price you pay for your insurance, usually monthly or yearly.

Rebuilt

If your car is totalled/written off, it will be branded “salvage” and won’t be legal for the road until it passes a safety inspection and is given the brand “rebuilt”. Anyone looking to buy the car or get it insured will see this brand as it is attached to the vehicle’s vin.

Red book

Canadian equivalent of the blue book, which is the insurance industry-recognized source for accurate and up-to-date wholesale and retail values for cars and trucks.

Regular market/regular insurance market

This means that your insurance is not considered high-risk. Insurance companies in the regular market insure most canadian homes and drivers. High-risk insurance companies insure homes and drivers that can’t get insurance in the regular market because of a bad driving record, a history of costly claims, or other reasons.

Reinsurance

Insurance for insurance companies. Basically this is protection for your insurance company against large-scale events that could overwhelm their ability to pay claims. Imagine a hurricane that causes major damage across a wide area. A regular insurance company might have to pay more out in claims than they have in reserve. That’s why they buy reinsurance, to protect themselves and their policyholders in these rare events.

Renewal

Most years, assuming your insurance company still wants your business, they will send you a notice of renewal about 2 months before your policy ends. If you don’t respond, the policy renews as per the notice. Note that often the rate does go up. If you’re not happy with the terms or the price that’s been quoted in the notice, it’s up to you to make other arrangements and then notify your insurer that you don’t wish to renew.

Renters insurance

Also known as tenants insurance.

Replacement cost

Replacement cost is the cost of replacing your property (car, house, fridge etc.) With a comparable new item. No deduction for depreciation. Your home and most of the items covered under home insurance would be insured for replacement cost.

On the other hand, if your property is insured for actual cash value (acv), after a total loss, the insurance company will pay you what it was worth just before the accident, applying accepted formulas for depreciation.
In auto insurance, insuring for replacement cost is called a waiver of depreciation.

Residual market

Because auto insurance is mandatory in Ontario, there needs to be an insurance market for people who are unable to find coverage in either the regular market or the high-risk market. Hence “residual”. The organization that was created for this purpose is called facility association. It is funded by all the insurance companies that sell auto insurance in the province.

RIBO

RIBO stands for the Registered Insurance Brokers of Ontario, which is the self-regulatory body for insurance brokers in ontario. You should only deal with a broker that is RIBO licensed.

Rider

Same thing as an endorsement.

Risk

This is a word that is used in a number of ways in insurance. Sometimes it is used interchangeably with the word peril, as in an all risks or all perils home insurance policy. In this case, risk is referring to the different events that can lead to a loss. So fire would be a risk, wind would be a risk, etc.

Risk can also refer to a person or property to be insured. Insurance companies think in terms of good risks (a person or property that is likely to be profitable) and bad risks (the opposite).

Finally, risk is also used in the general sense. Insurance is a form of risk management or risk mitigation.

S

Salvage

After it’s been in an accident, if your vehicle is deemed to be a total loss or a write-off, it will be branded “salvage”, meaning that it needs to pass a safety inspection and given the brand “rebuilt” before it can be legally driven again. The brand can be looked up by anyone who has the Vehicle Identification Number (VIN), including your broker or insurance company. You won’t be able to get insurance on a salvage vehicle.

Schedule/schedule of insurance

A list that details items covered under an insurance policy. If you want full coverage for your jewelry, fine art or collectibles, for instance, you’ll need to “schedule” them, listing each item and its value. To schedule an item in your home insurance policy, you’ll need a professional appraisal, and you can expect to pay 1.5 to 2% of the item’s value per year in premiums.

Short rate cancellation

If you cancel your policy in the middle of your policy term, your insurance company will use their short rate cancellation table to determine how much of your premium will be refunded based on the portion of the coverage that has been used. Essentially, based on how many days out of 365 you’ve already been insured. There is usually some kind of a penalty, meaning that if you’ve used exactly 10% of the policy, you won’t get back 90% of your premium. If your broker or insurer made a serious error that led to the cancellation, you may be able to cancel on a pro rata basis, meaning no penalty.

Slander

The third party liability section of your home insurance policy protects you if you are sued for slander, which means you said something that was damaging to another person’s or business’ reputation. If you say it, it’s slander, if you write it, it’s libel.

Social host liability/liquor liability

If you have a party (large or small) where you serve alcohol, you could be held liable if one of your guests gets drunk and ends up causing a car accident and hurting someone. This coverage is not included in a home insurance policy. You need to buy it as part of a special event policy if you’re having a large party or wedding. Learn more.

Soft market

When there is a soft market for insurance, consumers see stable premiums and have lots of insurance companies competing for their business. From a business perspective, it means that insurance companies are making a healthy profit (8% or more) and want to take on more customers.

Special event insurance

Businesses or individuals may need a special event policy for any event that falls outside of their regular activities. For example, a wedding in your backyard wouldn’t be covered under your home insurance policy.

Statutory Accident Benefits Schedule (SABS)

Also known simply as accident benefits or AB, this coverage is mandatory for all drivers in Ontario. Learn more.

Subrogation

Sometimes, after an insurance company pays a claim, it will go after a person or business that they feel was responsible for the loss. For example, if your neighbour’s tree falls on your house, your insurance company will pay to fix your house, and then may go after your neighbour’s insurance company to recover what they paid you, especially if there is evidence that the tree was dead and your neighbour should have had it removed.

T

Tenants insurance

This is the equivalent to home insurance coverage for people who live in a rented dwelling (apartment or house). Includes liability coverage in case someone is accidentally injured in your unit, and contents coverage for your possessions in case they are stolen or damaged by fire or a water leak. Although it doesn’t protect the physical building you live in (your landlord should have that covered), it does include Additional Living Expense coverage in case your unit is rendered unusable after a loss (fire, flood etc.) and you need to stay in a hotel while repairs are being done. Learn more.

Term

The term of an insurance policy is the period of time for which it is in force. A typical term for an auto or home policy is one year. A special event policy may have a term of one day.

Insurance folks also sometimes say “term” when talking about term life insurance.

Term life insurance

A term life insurance policy (also called temporary life insurance) protects you over a specific period of time. Generally, term life insurance policies are 5, 10, 15, 20 and even sometimes 30 years in length. When you are younger, term life insurance will be cheaper than Permanent Life Insurance , but term life does not protect you from premium increases as you age. The exception is if you purchase a “term to 100” plan, where premiums remain level and there is no cash value if you terminate. Learn more.

Terrorism

Home insurance typically does not cover acts of terrorism or war. Businesses can buy standalone terrorism coverage in addition to their basic business coverage.

Theft insurance

Theft is a peril that is usually covered by automobile or property insurance

.

Third-party liability (TPL) coverage

Mandatory for auto insurance in Ontario. This covers you when the driver of your vehicle is legally liable for injuries to another person or for damage to another person’s property. Mitchienienienien strongly recommends $2 million in TPL coverage. Learn more.

Tort

A tort is an act or omission that causes harm to an individual or damage to property, leading to a lawsuit. A tort-based auto insurance system requires injured parties to sue at-fault parties for their losses. By contrast, in Ontario’s no-fault auto insurance system, your own insurance company pays for most of your losses, regardless of who is at fault.

Total loss

Your auto insurance company may deem your vehicle a total loss after an accident, meaning that the cost of repairing it exceeds the value of the vehicle. In this case, the insurer will write you a cheque for the red book value of the car (before the accident), and the damaged vehicle becomes the property of the insurance company. Usually sold for scrap metal.

Also called a write-off or in slang terms, it can be said that your car was “totaled”.

U

Umbrella coverage/umbrella policy

This is a special liability coverage that fills gaps in liability coverage you may have under your home and auto insurance, and allows you to have a higher combined policy limit that covers you regardless of whether the loss is related to your car, your home, or something else. Learn more.

Underwriter/Underwriting

An underwriter is the person who ultimately decides whether an insurance company will insure you or not. Employed by insurance companies, an underwriter is responsible for applying the company’s underwriting rules to determine whether you would be a profitable customer or not. For example, some companies don’t want to insure homes with certain kinds of wiring or people with a certain number of past claims.

Uninsurable peril

A peril that you can’t buy insurance for because that type of loss is predictable or preventable. The most obvious example is overland flooding coverage for homes built on flood plains (areas known to flood repeatedly).

Uninsured driver coverage/Uninsured motorist coverage

Mandatory coverage for all Ontario drivers, covers you if you are injured or killed by an uninsured driver (including an unknown hit-and-run driver) who is found liable for the accident. Learn more.

Unnamed insured

People who are not named in your insurance policy may still be covered by the policy. For example, if you drive your neighbour to the doctor, they are an unnamed insured while they are in your vehicle. If you crash while they are in the car, their injuries are covered.

Universal life insurance

Universal life insurance is a form of permanent life insurance that gives the policyholder the ability to shift funds between the savings and the insurance components of the policy. Universal life insurance typically has the most flexibility regarding premium payments, death benefits and savings. Learn more.

Unoccupied building

If you are away from your home on vacation, the home is considered unoccupied. Your policy will have restrictions and exclusions if you are away for a certain period of time so you must have a responsibe person checking your home regularily and documenting whn checked in case a claim occurs while you are away.

V

Vacant building/Vacant dwelling

If your home is empty (say you move all your furniture out in anticipation of selling it), the home is considered vacant, and losses related to vandalism, theft, broken glass and water damage may not be covered. Not the same as an unoccupied building . Vacant dwelling means there is no intent to return.

Vehicle Identification Number (VIN)

Your vehicle’s unique identifier. Actually a combination of 17 letters and numbers, found on the vehicle’s driver-side dashboard. You can use the vin to search a vehicle’s accident and theft history, if any.

Void

There are a number of circumstances that could void your insurance policy, or certain coverages under the policy. If you’re found to have lied on your application, or if you didn’t tell your broker about changes to your home or vehicle that could have a significant impact on your level of risk, it could void your coverage, which is like not having insurance at all.

W

Waiver of depreciation

Usually, your vehicle would be insured for whatever its Actual Cash Value (ACV) was just before an accident. However, if you are the first owner of the vehicle and it’s less than 3 years old (5 years with some insurance companies), you can purchase a waiver of depreciation so that if the car gets totaled in an accident or stolen, you get a new car.

So if your 2019 Ford Mustang is insured with a waiver of depreciation and it’s totaled in an accident in 2021, the insurance company will pay the lesser of the following:

• The full price of a brand new 2021 Mustang; or
• The original purchase price for your 2019 Mustang.

Learn more.

Warranty

In the context of insurance, a warranty is your promise that you will meet certain conditions in order to keep your insurance in force. (it’s what you’re agreeing to when you sign the policy documents.) If you are found to be in breach of this warranty, that could be used to void your coverage.

Whole life insurance

Whole life insurance is a type of life insurance that is considered a permanent plan. This policy will last from the time it is purchased until the owner cancels the plan or passes away. The cost of these plans does add up since they do last throughout your lifetime and never expire. These policies will often allow you to cash out against them as well and offer a payout. Learn more.

Write

In insurance speak, to “write” something is to insure it. So you might hear an insurance broker say that certain insurance companies don’t like to “write” certain types of drivers or homes with old wiring etc.

Write-off

If an insurance company thinks it would cost more to fix your vehicle than the vehicle is worth, they might write it off, meaning they write you a cheque for the ACV, and they take possession of the damaged vehicle. A vehicle in this situation might be called a write-off. Also called a total loss.