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Auto and Home Insurance Glossary
Anti-theft system
An anti-theft system is a mechanic or electronic device that is used to protect your vehicle against theft. There are several types of anti-theft systems available:
- Startup blockage mechanism: Device that cuts off contact, ignition, or fuel supply, thus preventing the vehicle from starting.
- Serial startup blocking mechanism: Device installed by the vehicle manufacturer that cuts off contact, ignition, or fuel supply, thus preventing the vehicle from starting.
- Alarm: Signals (alarm, lights) activated when someone gets close to and/or touches and/or attempts to steal the vehicle.
- Marking, engraving: The vehicle’s serial number is engraved on several parts of the vehicle (e.g.: Sherlock, Vinlock).
- Tracking system: System that is used to locate a vehicle that has been stolen (e.g.: Boomerang, Espion).
At-fault accident
An at-fault accident includes things like hitting a car in front of you, turning left in front of another car, or backing up and hitting a pedestrian or a car. Usually, the police were involved and you had to pay your insurance deductible.
Binder
A temporary agreement that provides coverage until a policy is written or delivered. A binder has the same value as an insurance policy but for a shorter period of time.
Cancellation
Final and anticipated termination of the policy. Most policies are renewed automatically. Only the insurer or the insured may terminate coverage.It is therefore not enough to simply stop paying the premium. Both parties have to comply with specific time frames and terms for cancelling a policy.
Civil liability
In Quebec, the owner of an automobile must hold a liability insurance contract (Section A) that guarantees the indemnification of material damage caused by the vehicle. This insurance also covers damage to your vehicle in the event of an accident where you are not at fault. Most vehicle owners buy additional coverage for collision, fire, theft and vandalism.
Claims adjuster
The adjuster is a person who reviews and settles claims on behalf of the insurance company.
Collision or upset
By Collision we mean a collision with the surface of the ground or with an automobile attached to your car. By “Upset” we mean the partial or complete tipping over of a vehicle.
Compensation
The act of compensating the insured or victim for the damage they suffered. The amount to be paid appears on the policy.
Comprehensive coverage
Comprehensive coverage protects your car against damage caused by missiles, falling or flying objects, fire, theft, explosions, earthquakes, windstorms, hail, flood, malicious mischief, riot or civil commotion. It also covers damage from collision with a person or animal. There usually is a deductible to be paid at the time of repair or deducted from the amount of indemnity paid for the loss.
Declarations
The portion of the insurance contract that describes the policy criteria which apply to the situation or the insured’s specific needs and which determines, as applicable, the object of insurance, the coverage terms and the premium payable.
Deductible
Predetermined amount the insured must pay before receiving any compensation from the insurer further to a loss or damage. In exchange, the insurer offers the insured a decreased premium. The higher the deductible is, the lower the premium is going to be.
Effective date
The date when an insurance contract or amendment becomes effective.
Endorsement
An endorsement is a written agreement describing any amendments made to an insurance policy, such as additional coverage, a change of owner, etc.
Exclusion
Situation that is not covered under your insurance policy, such as earthquakes or losses resulting from an armed conflict.
Expiration date
The date when an insurance contract ends.
Fire resistive
A building with a frame, walls, and floors constructed of masonry or other materials that can resist fire for up to 2 hours, or 1 hour for the roof.
Hangar
Extension to a building, with a lean-to roof or isolated, which contains personal property with relation to the insured residence. Are excluded from this definition: garages, car-ports and sheds.
Hit-and-run accident
Damage to a vehicle caused by a third party who left the scene of the accident.
Insurance agent
The insurance agent is a certified professional who represents an insurance company and whose role consists in providing advice to clients on the protections that are best suited to their situation as well as information regarding the risks covered.
Insurance certificate (pink card)
An insurance certificate is a written statement by the insurer that there is an insurance policy covering the vehicle, such as for the purpose of civil liability. You must have this document in your vehicle at all times.
Insurance contract
An insurance contract is a legal document confirming the presence of insurance and setting out the terms of the contract of insurance.
Insurance coverage
Extent of the coverage provided by the insurance contract.
Insurer
Any company that provides various types of insurance protection and services, that covers the risks, and that issues insurance contracts.
Joint report
A document that is used to report a loss, which clearly states the circumstances of the accident. It comprises the signed declarations of both parties involved. The joint report speeds up the claim process.
Loss
Damage or loss suffered by the insured as a result of a fire, an accident, etc.
Minimum Liability Limits
Canadians are required by law to have third-party liability insurance. This covers damages and liability in case you injure or kill someone or damage someone's property in a car accident. For instance, if you injured a pedestrian while running a red light, third-party liability coverage would pay the costs of the victim's injuries. If you damaged the victim's bicycle, it would pay for the bike's repair. How much liability insurance you require depends on the province where you live.
Mandatory minimum liability insurance in Canada (except in Quebec) requires coverage for $200,000. In Quebec, the minimum liability requirement is $50,000.
Premium
Amount determined by the insurer for what it will cost to obtain insurance coverage. The amount of premium varies according to several factors, including age and place of residence.
Principal residence
A residence that is occupied on a regular basis as a principal dwelling.
Quote
A quote is a proposal made by the insurer regarding the cost of a premium for a given risk.
Rating
Calculation of the insurance premium to be paid according to various risk factors, including age and place of residence.
Registered owner
The owner of the vehicle is the individual whose name appears on the registration certificate.
Renewal
Upon reaching the policy term specified on the contract, if there have been no amendments to the insured or coverage, the insurance policy is renewed automatically on the same terms and conditions. A renewal notice is then issued to policyholders. We urge our clients to notify us of any changes that may affect the coverage or premium.
Replacement cost
Replacement cost is an additional coverage that protects your vehicle from depreciation in the event of total or partial loss. If you buy or rent a new vehicle and you have a good record, you can take out replacement cost coverage for a period of 2, 3 or 4 years.
Risk
Probability of occurrence of an event that is uncertain or which term is undetermined, which is not exclusively dependent on the control of the parties involved, and which may result in the loss of property or any other type of damage.
Seasonal residence
A residence that is occupied by the insured on an irregular and occasional basis and which can remain unoccupied for several months.
Secondary residence
A residence that is occupied as a second dwelling on a regular basis throughout the year rather than a seasonal basis.
Waiver of deductible
In some cases and under specific conditions – e.g. hit-and-run – the insured who suffered a loss may not be required to pay the deductible amount.
Water damage
Direct damage caused by the sudden and accidental discharge, overflow or backflow of water from:
- sewer, sump or septic tank
- eavestrough, downspout or rain conduct
- containment ditch, catchment basin or French drain
Depending on your situation, we recommend adding a water damage endorsement, which also covers direct damage caused by seepage or influx of surface or ground water and sewer backup.
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