Glossary of insurance terms

Refers to a policy covering items that are individually or specifically described.

A fire protection system in which sprinkler heads are installed at the ceiling level of the building and at certain regular intervals. A fire automatically activates the sprinkler in the particular area involved.

A named-perils homeowner's policy which can be issued in cases where you might not qualify for regular homeowner's insurance. Some coverages, limits and features are reduced, changed or deleted from the regular homeowner's package.

Device that prevents a vehicle engine from being started.

A written statement by a plaintiff detailing the facts that support the claim against the defendant and the compensation sought.

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

Safekeeping of property in a warehouse.

The substitution of one person or company, for another so that the rights and duties of the original person or company becomes operable by the other. In insurance, it applies more particularly to indemnity policies. Where an insured is fully indemnified by an insurance company for a loss, the company so indemnifying the insured will, in some instances, have the right to benefit financially from any claim made against a third party who was responsible for the damages in the first place.

A policy usually in a fire insurance field in which two or more insurance companies may all subscribe to the one policy and indicating on the policy, the apportionment to be borne by each company. The advantages to an insured are mainly that all companies offer exactly the same wording and he has only one policy instead of many.

Coverage consisting of accessory elements that support other, more important elements.

Insurance risks that are more hazardous than the standard risks and accordingly require somewhat higher rates.

Increase in premium amount according to perils.

A person (or generally an insurance company) who undertakes to agree to be responsible for certain acts or performances of one party to another party.

An agreement (not an insurance policy) by which the person or insurance company (known as the Surety) guarantees or agrees to be responsible for certain acts or performances which one party is undertaking to perform for another. the person for whom the work is being done is known as the obligee and the person who is required to perform the work is the principal. E.g. A contract bond in which an insurance company as surety guarantees owners of the building under construction (the obligee) that the contractor (Principal) will have sufficient money etc. to perform their undertaking under the contract.

Individual or corporation who leases property from a lessor.

The period of time from the inception to the termination of an insurance policy or bond.

Underwriting element of an insurance premium relative to a specific geographical area.

Wrongful taking of property without the consent of its owner.

The first person referred to outside the particular transaction involved. In an Insurance Liability policy the third party is a person who may be injured or whose property may be damaged other than the insured or the insurance company. There maybe many parties in one case.

Third-party liability automobile insurance is designed to indemnify the insured for financial loss incurred through legal liability for bodily injury and damage to property of others caused by an accident arising out of ownership or operation of an automobile.

A wrong ,or a breach of duty, committed by some person as regards some other person, which gives rise to a cause of action at the hands of the injured party. Some of the forms of Torts are as follows: Trespass on Land - The act of entering on the property of another without permission on or invitation from the owner. Trespass of Goods - The improper retention of the property of another. Trespass of Person -Assault, battery, false imprisonment, malicious prosecution, etc. Some forms of Pleading in Tort actions are as follows: Dentiue - An action asking for the return of the plaintiff's property or its value. Replevin -Sometimes an article in itself is virtually irreplaceable and an action in replevin demands the return of that particular article. Again if it is not possible to return the article then judgment is given on its value. Distress - Sometimes the goods of another might be held as security even without the actual owner's consent. e.g., Personal property of a tenant may be seized to secure rent. At one time this could only be held as security but it is now possible that in event of the rent due not being paid goods may be sold and the proceeds credited toward the rent. If such goods are improperly held it is said to be wrongful distress. Conversion -The wrongful changing of property to which one is entrusted to one's own personal uses. e.g. A company automobile is taken by the employee and sold and the proceeds used in the personal affairs of the employee. Negligence - Doing something a prudent man would not do or not doing something a prudent man would do, the result of which results in loss by damage or injury. Nuisance - An act unlawfully interfering with the person's use or enjoyment of land including the interference of easements and allowing or causing the escape of obnoxious things on the land of another. Some of the defenses to a Tort action are:(1) The denial or dispute of the alleged torts. (2) Volenti non fit injuria or Scienti non fit injuria. (3) An inevitable accident or an act of God. (4) An act authorized by statue. (5) An act of necessity. (6) An act in defense of one's own property.

Complete loss of physical capacities.

Loss value greater than replacement value of the property.

Motorless vehicle designed to be pulled.

Goods transported in any type of vehicle.

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

Insurance amount that is less than the full value of the property insured.

The insurance company or group that underwrites or insures a particular risk. It is also used as the identification of the identification of the individuals within the company whose responsibility it is to accept or reject business in the particular line in which they specialize and in this way choose risks their principals are prepared to underwrite.

The excess of earned premiums over incurred losses and expenses shows the underwriting profit. The reverse would show an underwriting loss.

Where the premises is complete with its content except for the human beings, such persons being temporarily away from the premises, as for example on vacation or any other reason, the premises are said to be unoccupied. Premises that are unoccupied or vacant, present a greater hazard and standard fire insurance policies permit unoccupancy of the premises for only a certain period of tie. I f the unoccupancy is going to extend beyond that time, it is necessary to have and endorsement added to the policy. In protected areas, it is not usually difficult to obtain such an endorsement and an additional charge can be expected. It is distinguishable form "vacant" in that in vacancy, the contents have been moved out leaving nothing but the building whereas in unoccupancy, only the persons occupying the premises are not there.

A basic principle of any insurance contract. Both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information relevant to the proposed contract. Also known by its Latin equivalent Uberrimae fidei.

Status of a dwelling whose occupants have left it with no intention of returning; also, status of any newly built dwelling between the time the work is completed and the time the first occupants move in.

A building with no occupants or furnishings.

Articles of personal property having great worth.

Intentional destruction or damaging of property motivated by malice or revenge, referred to as Malicious mischief.

Number appearing on a vehicle licence plate.

Liability imposed upon a person even though he is not a party to the particular occurrence, e.g. the owner of a motor vehicle is vicariously responsible for injuries even though he is not driving the car at the time of the occurrence.

Breach of a law or of a regulation.

Coverage in the second part of the home insurance contract providing for voluntary payment to the insured, for bodily injury suffered by a person other than the insured and for which medical expenses are incurred.

Coverage in the second part of the home insurance contract providing for voluntary reimbursement to the insured, for repair/replacement of property other than the insured's.

The intentional relinquishment of a known right. A waiver under a policy is required to be clearly expressed and in writing.

A guarantee or assurance. A stipulation I n a contract, the breach of which nullifies the contract, such as certain warranties in an insurance policy. Also, used as a guarantee of condition, such as, "warranty of fitness." Warranty is essentially a guarantee. Warranty of the contents of a formula guarantees that the formula contained in the bottle conforms with the statement on the outside. A warranty against defects in workmanship and material is a guarantee that if the product is defective, the manufacturer will replace the part or perhaps the product itself. In insurance, a warranty is the general atmosphere of facts upon which the policy is rated and written.

Craft designed for navigation on water.

Weather phenomenon characterized by very strong winds capable of damaging property or dwellings.

An action taken during claims negotiations designated as "without prejudice" is intended to be without detriment to the existing rights of the parties.

Means of heating a dwelling.

One policy covering all involved interests of a big construction project, e.g., the owner, contractor, sub-contractor, suppliers, etc.

The total amount of premium collected on the class of business or on all classes of business or on all classes of business.