The definitions in this glossary are provided to assist you in having a general understanding of insurance and in no way do they represent the full legal definitions of all terms, conditions and exclusions as contained within an insurance policy.
Further, any discussion, mention or display of coverages and products on this website are for informational and educational purposes only, in order facilitate any conversations you might have with a licenced insurance representative from Brokers Trust Insurance Group Inc.
Should, in the event, there be any discrepancy between the definitions and/or the coverages and products as stated within this website, and those as stated in the policy wordings themselves, the definitions contained in the policy wordings shall take precedence.
Choose Your Word
An unexpected event that is not expected nor usual to the normal course of events
Provides Benefits if you are injured in an automobile accident, regardless who is at-fault.
Additional Named Insured
An individual or company who has been listed on the policy as an additional interest to certain property, as there involvement may cause a claimant to name them in a claim; holding the additional insured liable.
A person who investigates and settles losses, usually for an insurance company
An individual who sells insurance related products and only represents ONE insurance company
All Risk Policy
A policy type that provides coverage for loss from any direct physical damage except those specifically excluded in the policy wordings
Act of God
Any type of naturally caused event that could not have been foreseen or prevented with reasonable care or foresight, of an immense magnitude (i.e. Earthquake, Hurricane, etc.)
Actual Cash Value
The original cost of an item less its depreciated value. Also considered the current market value and/or the resale value of the item
A valuation of property to determine its current value, used to determine the amount of coverage needed
Covers a person against the associated risks of operating an automobile including, litigation, injury and property damage
Avoidance of Risk
Taking steps and precautions to completely “avoid” the chance of loss
An individual who represents many different insurance companies, and is part of an independently owned insurance brokerage, having no specific loyalty to any one company
A temporary agreement that is put in place until the insurer is able to write and deliver the policy
Refers to physical injury, health and psychological issues that can arise when a person suffers bodily injury from an auto accident or a third parties negligence
A type of property policy that covers loss from a specified list of perils, including extended coverages
The unlawful removal of property of others from a premises where signs of forced entry and/or exit are clearly visible. Is considered a kind of theft.
The process of applying for financial indemnity to your insurance company following a loss.
A word used to describe a section and/or condition of a policy
Covers persons, drivers and passengers, from bodily injury when involved in an incident with an automobile, as well as damage to the automobile itself. It also protects you from possible law suits if you were the at-fault party
Ensures that people insure their property to its actual value. When people do not insure to value, they will share in the cost of the loss by the percentage they were short in regards to the limit of insurance and the actual value of their property
Coverage that pays for losses arising from perils out of your control such as Windstorm and Hail, Theft, vandalism, Lightening, Fire, falling objects, etc. Is subject to a deductible
In Ontario, compulsory coverages include Liability, Accident Benefits, Direct Compensation-Property Damage and Uninsured Automobile
Is the front page of any insurance policy which outlines the risk and that information that pertains to that specific risk
It is the portion of the value of a risk that is self insured by the owner of the property. It is also used to cover the administrative costs associated with processing a claim, as well as, used to help lower insurance premiums
The decrease in value of property over time due to its frequency of use, age and obsolescence and its wear and tear.
Is damage cause directly by an insured peril listed on the insurance policy. Broken widows from a hail storm
Direct Compensation - Property Damage
It is the coverage on the policy that pays for a loss involving an automobile that is determine not to the fault of the insured. No Deductible applies
Is that date that insurance coverage takes effective on a policy, usually for one year terms. Can be found on the “declarations page.”
The fraudulent use of money and/or property that has been entrusted to one’s care
Is an amendment/change to an insurance policy, usually taking place mid-term, in coverages and/or other information pertaining to the risk
Are stipulation in within policy wordings that notify the insured what IS NOT covered under the policy
The date which coverages cease to exist under the insurance policy, usually one year after the effective date. Can be found on the “declarations page.”
Is the degree to which a persons property is threatened by loss due to the internal and/or external conditions that surround a risk
Extends coverage to one’s property in the event of loss to additional perils that are listed on the policy
A policy that provides coverage for property that is highly mobile. Contractor moves equipment from job site to job site.
Is a condition or situation that increases the chance of loss by an insured peril listed on the insurance policy
Is the care and maintenance a person directs toward their property to keep it clean and in as good condition as possible
Additions and changes made by a lessee at his own cost to a building that he is occupying, enhancing its value. These changes require additional coverage to ensure the interest of the tenant is protected
To restore a person to the financial position they were in before the loss and/or damage occurred, no more and no less
A loss that occurs indirectly from an insured peril. A building is burnt by fire is the direct loss, and the building owners loss of rental income is the indirect loss.
Does the applicant of insurance meat the underwriting rules and guidelines of the insurance company they are applying to
Is a method of transferring risk from oneself to a third party, where the third party receives a premium for accepting that risk
Is the contract between the insured and the insurer that sets out the terms and conditions of the coverage to be placed
Insurance to Value
Means ensuring a piece of property to is full estimated value
The person who is transferring the risk to a third party; the owner of the insured property
The third party, in this case, the insurance company, that is assuming the risk in return for a premium
Is the termination and/or cancellation of an insurance policy by the insuring company due to non-payment by the insured
Is the person who is leasing a piece of property from another party
Is the person who is lending a piece of property to the lessee
Is the coverage on the policy that will pay for losses in the event you are sued for committing some type of negligent, non-criminal action
Is a written, printed or, pictorial defamation towards one’s character
Is the financial burden that one would have to bare in order to replace, repair or rebuild property that has been damage by a particular situation and/or event
Loss of Use
Coverage that is added by endorsement to an auto policy that will pay for replacement transportation should one’s vehicle become incapacitated due to an insured peril and/or automobile collision
Refers to the factual information that is provided by the applicant of insurance about the risk in question which helps the insurance underwriters estimate the risk and determine the premium charged
Are false statements given by the insured regarding the material risk that would cause the premium to be lower, not reflecting the actual risk in question, causing a bias towards the insured at the expense of the insurer
A persons morals or habits that would cause his actions to increase the chances of loss occurring from an insured peril, such as the refusal to do housekeeping.
Is the institution or person who lends money for the purchase of assets, using the value of the assets as security for the loan
Is the person or company that is receiving the loan for the purchase of an asset from the “mortgagee”
The first person who is listed on the insurance policy, usually also known as the applicant of insurance
Failure to use that degree of care, which an ordinary person of reasonable prudence would use under the given circumstances
A system where an insurance company will pay automobile claims on behalf of their own client, regardless who is determined to be at fault
Coverage that pays for losses when an individual is determined to be at fault in an accident, or that individual hits any freestanding object that is not moving and/or secured to the ground (i.e. curb) Is subject to a deductible.
Notice of Loss
A notification to the insurance company that informs them that a loss has occurred. Part of the claims process
Usually refers to a driver that lives in a household with less cars than residents, that uses a vehicle only a small percentage of the time
Defines what the property is used for, either residential, commercial or industrial. If the latter two, what type of business or industry inhabits the premises
An event that occurs at a specific period in time that results in an insured loss. One can have multiple occurrences during one policy period
A loss by an insured peril that damages only part of the property insured, and which doesn’t exhausted the limits of the policy
Is the cause of a loss such as fire, lightening, theft, etc.
Personal Articles Floater
Is added to the standard property policy covering valuable personal property such as jewelry, cameras, and artwork whose coverage values are limited by a standard property policy
Physical Damage Coverage
This is a general term that refers to the cover that insures you against the damage to your car including both “comprehensive coverage” and “collision coverage.”
The material, structural , or operational features of a risk itself which increase the chances of loss by a peril
Is the formal contract sent to the insured by the insurance company after the company receives and processes the application
Also referred to as the named insured and/or the applicant, is the person(s) or company whose chance of financial loss due to damage from a peril is insured under the issued policy
The entire area at any location within property lines and areas under adjoining sidewalks and driveways, as well as vehicles parked within 100 meters (328 feet) of such location
The dwelling location that one resides at for the majority of time within a policy term
The person listed on an insurance policy who drives the described automobile most often
An class of risk that does not meet an insurance companies underwriting guidelines, thus not insuring the risk
Proof of Loss
A step in the claims process where an insured submits proof of the specific property that has been damaged or destroyed in a loss
Is an estimated cost of insuring a risk based on the information given to an agent/broker by the applicant
Is the per unit cost of insurance.
Is the offer made by an insurance company to continue the coverage on the current policy for another term. Usually sent out a few months before current policy is nearing expiry.
Is the dollar value to replace an item of like kind and quality, no matter how out-dated, how weathered, or how much the actual cash value has decreased
A chance of having a loss and/or a person or piece of property that is insured
The process of evaluating the possibility of loss and the analysis of how best to reduce, retain or avoid the possible risks in question
The taking of personal property from an individual using force causing injury, incapacitation or even death. If considered a kind of theft.
Would be considered the final step in the claims process whereby the insured is indemnified for the loss which he/she was insured against
Refers to the right of an insurance company to take your place in suing to recoup monies paid to you on behalf of an at-fault third party
Coverage that specializes in covering on contents for people who rent, as they have no interest in the building, unless “improvements and betterments” are made
An act of taking property which does not belong to you without the consent of the owner.
Is considered a loss where the property is so badly damaged that the cost to rebuild or repair exceeds the cost to replace the damaged property; or being impossible to rebuild or repair the damaged property due to the severity of the damage
Transfer of Risk
The act of transferring the possible risk of financial loss to a third party for a price, normally call a “premium”
A liability policy that acts like an ‘umbrella’ over all other policies an insured has, covering the insured in the event that the limits on the base policies are exhausted. Usually adds bonus coverages as well.
A person trained to evaluate and price out a risk who works for an insurance company, or an insurance brokerage
The process of evaluating and pricing risks in order to provide insurance coverage
Is the malicious and willful act of damaging property that belongs to others