No Fault
The term used to describe a system for improving the compensatory process for automobile accident victims by eliminating costly and lengthy litigation. Simply it means paying certain claims without reference to who was at fault.

Non-combustible
Materials, no part of which will ignite and burn when subjected to fire.

Non-disclosure
A contract of insurance is based on utmost good faith. An applicant for insurance is required to disclose to the company all material facts which are necessary to underwrite a policy. If the applicant does not disclose all these facts, he/ she is guilty of non-disclosure and may risk having coverage voided from inception.

Non-insurable Risk
A risk for which no insurance can be written. The chance of loss is very high or cannot be accurately measured.

Non-owned Automobile Insurance
A policy which protects the insured against third party claims arising out of some other person using their own vehicle in the business of the insured.

Non-valued Policy
A policy is valued when it promises to pay its face value in case of total destruction, irrespective of the value of the insured property. In other words, the value is agreed upon in advance. Used only for certain classes of property such as fine arts or ocean marine. Ordinary policies do not contain agreement and are therefore "non-valued."

Notary Public
A person (usually a lawyer) appointed by the provincial Lieutenant-Governor with the power of drawing and keeping Deeds and of attesting protests of dishonoured negotiable instruments. This person is also a Commissioner of Oaths before whom affidavits are sworn.

Notice of Loss
The conditions of the insurance policy require that any person sustaining a loss insured by the policy shall immediately give notice to the company of such loss. Failure to give notice as required has been held to be a bar against recovery. The notice is required to be in writing, and verbal notice to the agent or broker will not be sufficient to comply with the condition.

Notice of Termination
The conditions of insurance policies stipulate how a policy may be terminated during its term. For example, a policy may be terminated by the insured at any time or by the insurer who must give the insured a certain number of days' notice of termination by registered mail or a certain lesser number of days' written notice of termination personally delivered.

Null and Void
Of no legal or binding force; invalid.

Obsolescence
Impairment of desirability and usefulness brought about by changes in public preference or by forces in addition to those which cause deterioration. Functional obsolescence refers to impairment of functional capacity or efficiency. Economic obsolescence refers to impairment of desirability or utility arising from economic forces such as changes in highest and best land use, legislative enactments which restrict or impair property rights, and changes in supply demand relationships.

Occupancy
Occupancy is the act of holding possession of property or premises. The term implies the use of the building for the purposes described in the policy, and no other. An occupied building has furnishings and/or people in it.

Occurrence
A happening or event. Liability policies are usually written on either an accident or occurrence basis. For coverage on an accident basis, the loss or damage must be due to accident, whereas on an occurrence basis all that is required is the happening or the continual or repeated exposure to an unfavourable situation, neither intended nor expected to cause injury or damage. In reinsurance and insurance, it is also the grouping of related losses into a single loss situation.

Off Premises Clause
A provision in residential policies affording coverage on some of the household goods when away from the premises. within certain limits.

Operations
The business of an Insured or the type of business of an Insured.

Optional Settlement Clause
A clause in an insurance policy permitting the insured under certain circumstances to have a choice of benefits.

In accident and health policies the insured may have a choice of payment of various amounts as periodical indemnity for a certain period of time or a lump sum settlement of a pre-determined amount set out in the policy.

Other Insurance
Normally an insured must disclose to an insurance company from whom he is purchasing insurance, information about what insurance he already carries on the property.

As a matter of principle, the insured should also advise existing insurance carriers of new policies which he is taking out. This is an essential point in the matter of disclosure.

It is however frequently waived, as the more routine policies carry some such wording as "other concurrent insurance permitted without notice until required."

Outboard Motor Boat and Outboard Motor Policy
A class of inland marine insurance covering boats, motors and equipment for named perils (fire, collision and theft) or, at a higher premium, for all risks. Some policies include liability cover for property damage to other vessels.

Overlapping Insurance
When two different kinds of policies cover the same loss, the insurance is said to be "overlapping." This does not mean, for example, when two fire insurance policies cover the same loss, which is called "contributing insurance." However, if an inland marine policy and a fire policy covered the same loss, they would be overlapping.

Owner's, Landlord's And Tenant's Liability
Liability insurance coverage which gives protection because of liability arising out of ownership, use or occupancy; operation or maintenance of buildings or premises.

Package Policy
Any insurance policy which covers two or more lines or types of insurance in the same policy.

Pair and Set Clause
Establishes that loss or damage to one of a pair or set of individual items does not represent the loss of the pair or set.

Partial Loss
A loss covered by an insurance policy where the property or the premises are not completely destroyed or rendered completely worthless.

Peril
The event that caused a loss covered by the policy, e.g., fire windstorm.

Perjury
Giving false evidence or information while under oath.

Personal Auto Policy
Insurance policy issued to individuals covering risks arising out of the ownership or operation of a licensed automobile.

Personal Effects Floater
A policy covering personal effects usually carried by tourists. Can be all risk or specified peril form. Covers worldwide but excludes coverage at the insured's residence.

Personal Injury Liability
Injury other than bodily injury arising out of defined causes which usually include false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander or violation of a person's right to privacy other than in the course of advertising, broadcasting, television, publishing.

Personal Lines
Insurance for individuals and families, such as private passenger auto insurance and homeowners policies.

Personal Property
Legally, any property of an insured other than real property. More often used to refer to the personal property of family members insured under a Homeowner's policy.

Personal Property Floater (P.P.F.)
A Broad Form policy covering all personal property worldwide including at the insured's home, usually on an all risks basis.

Policy Conditions
Provisions which state the rights and duties of the insured or insurer.

Policy Limit
The maximum that the insurance company is obligated to pay in actual claims under an insurance policy. Certain additional costs may also need to be paid.

Policy Provisions
Statements contained in an insurance policy which explain the benefits, conditions and other features of the insurance contract.

Policy Year
Period between anniversary dates.

Policyholder
Individual or other entity who owns an insurance policy. The Insured.

Pollution Exclusion
Standard general liability policies include an exclusion for loss arising out of pollution. For certain exposures this exclusion may be modified. e.g., "sudden and accidental" pollution arising from a fire.

Power of Attorney
Authority given one person or organization to act for and obligate another to the extent of the instrument creating the power.

Preferred Risk
Any risk considered to be better than the average risk on which the premium rate was based.

Premises
Building including the land immediately surrounding it and belonging to it.

Premium
The price of insurance protection for a specified risk for a specified period of time.

Prescription
In law, a limitation of time within which legal action can be taken by a claimant. In insurance, the period of time in which a claim may be brought by the policyholder. Also Proscription.

Principle of Indemnity
The concept that an insured will be reimbursed for his loss (subject only to the policy limit and terms). If there is no loss there can be no indemnity.

Private Passenger Car
Four-wheeled motor vehicles of the private passenger, station wagon or van type, designed for use on public highways and subject to motor vehicle registration.

Product Liability
Liability insurance, generally for contractors, for products liability and for claims arising out of completed work.

Products & Completed Operations Insurance
Liability insurance, generally for contractors, for product liability and for claims arising out of completed work.

Professional Liability Insurance
Protects professionals against liability for damages and cost of defense based upon his/her alleged or real professional errors and omissions or mistakes, e.g., architects, engineers, medical malpractice, attorneys.

Proof of Loss
A formal statement made by a policy owner to an insurer regarding a loss. It is intended to give information to the insurer to enable it to determine the extent of its liability.

Property Damage Liability Insurance
Protection against liability for damage to the property of another including loss of the use of the property.

Property Insurance
Covers an insured's property against damage, destruction or loss by a covered peril.

Pro Rata Cancellation
Cancellation of an insurance policy or bond with the return premium credit being the full proportion of premium for the unexpired term of the policy.

Proscription
Outside the time period in which a legal action can be commenced. See also Prescription.

Protected
In fire insurance, a risk located in an area protected by a fire department.

Protection
Used interchangeably with "coverage" to denote insurance provided under the terms of a policy.

Proximate Cause
Cause of loss or damage. Unbroken chain of cause and effect between the occurrence of an insured peril and damage to property.

Punitive Damages
Damages in excess of those required to compensate the plaintiff for the wrong done, which are imposed in order to punish the defendant because of the particularly wanton or willful character of his wrongdoing.

Quantum
Amount or quantity.

Quasi-Contract
An undertaking that is not a written contract but is an implied contract. In insurance it is most frequently found in reference to preservation of salvage.

Quotation (Quote)
The amount of premium that an insurer sets as the price to cover a particular risk.

Rate
The price for $100 or $1,000 of insurance, usually for one year, expressed in dollars and cents. Alternatively, the rate is the premium for a specified amount of insurance, for a specified time.

For some types of insurance in some jurisdictions legislation requires rates to be applied consistently to similar risks, and certain jurisdictions require regulatory approval of rates, e.g. auto.

In addition to policyholder premium rates, the industry commonly uses the term "rate" in reference to reinsurance premium rates, and to commission costs for both insurance and reinsurance.

Receiver
Person appointed to hold in trust and to administer property of insolvent companies.

Refund
A return to the policyholder of part of the paid premium, because of cancellation, suspension, reduction in insurance coverage, or because of rate reduction.

Registered Insurer
The registration of a reinsurer is significant in determining whether an insurer can obtain full credit with regulators for the transfer of insurance liabilities to a reinsurer. Any reinsurer not under the regulatory control of a Canadian insurance regulator (is not licensed) is deemed unregistered and the primary insurer must cover any liabilities transferred to this unregistered reinsurer.

Note: Registration (corporate), should not be confused with Licensing (operations).

Regulator
The federal, provincial or territorial government agency responsible for the control and regulation of the insurance industry under its jurisdiction.

Reinstatement
The reactivation of suspended or cancelled insurance. Restoration of full amount of insurance or reinsurance after a claim has been paid, with or without the payment of additional premium.

Release
A discharge from obligation or responsibility. To let go of, or give up a legal claim. The most common types in insurance are: First Party Release - between the insured and the insurance company. Third Party Release - between the insured and a third party. Indemnifying Release - between the insured and a guardian for a minor or other person not legally competent.

Removal
The standard fire insurance policy insures against damage done in removing the insured property from the path of the fire or other insured peril (if loss is mitigated).

Removal also may mean the taking of property to some place other than that at which it was insured.

Renewal
A certificate which attests to the fact that an insurance policy has been extended for another term.

Renewal Premium
The premium for the new term of the policy.

Repairs
Generally an insurance policy will set out the conditions for an insured to effect repairs to insured property. Ordinary repairs are usually permitted without notice to the insurer.

Replacement
Most policies of insurance of property give the company the right to substitute other property of like kind and quality for insured property which has been damaged or destroyed. This is making a replacement.

Replacement Cost Clause
Applies generally to some fire insurance policies where a special cover may be purchased so that in the event of fire, repairs or replacement will be made with material of like kind without cost to the insured for depreciation or betterment.

Replacement Value
The cash value representing what it would cost to replace the particular article which is the subject of the insurance.

Representation
The acceptance or rejection of an insurance risk and the amount of premium that would be required, is determined by information submitted by the person applying for such insurance.

Statements which would normally lead the company to decline the acceptance of a risk, or to charge a much higher rate, are material to the risk and are commonly considered "warranties."

All other statements such as the insured's address, etc. are referred to as mere "representations" to distinguish them from the more important statements considered to be "warranties."

The penalty for false information on material facts or "warranties" may be voiding of the policy.

Rider
Another name for an endorsement.

Risk
The chance of loss. Specifically the possible loss or destruction of property or the possible incurring of a liability. Sometimes refers to the subject of an insurance contract.

Robbery
The taking of another's property by force or threat of force.

Salvage
The remaining value of property after severe damage by fire or other peril. The overall loss is reduced by the salvage value. Undamaged property may be quite saleable and some property may be partially damaged, thus repairable and then saleable.

Schedule
1) A comprehensive list accompanying a policy to detail the property, locations and amounts insured, and the applicable conditions.
2) In rate-making, the formula applied to determine a rate.

Scheduled Property Floater
An inland marine form of policy specifically insuring various individual items. Articles of unusual value, provided they are movable, may normally be written this way and insured against many hazards, often against "all risks."

Seasonal Risk
1) A risk occupied only part of the year, such as a summer dwelling.
2) In manufacturing, it may be a plant operating seasonally, such as a cannery.

Self-insurer
A person, corporation or organization which assumes all or part of a risk itself rather than use an insurer, government departments often self-insure.

Settlement
An agreement between concerned parties. In insurance, the agreement is usually on the money changing hands to discharge an insurance claim.

Settlement Options
The alternatives offered to the insured or the insured's beneficiaries when settling a loss. Life insurance policies provide either a lump sum payment or a set annual amount for a fixed period. Accident and health policies usually provide for weekly benefits along with the payment of expenses as they occur, even though the disability may not last long enough to total the lump sum option.

Short Rate Cancellation
The cancellation by the insured of a policy before its natural expiration; the insurer pays a return premium which is less than the proportionate part that remains unearned.

Slander
The oral utterance or spreading of falsehood harmful to another's reputation. Libel is written; slander is spoken.

Smoke Damage
Essentially, the devaluation by smoke, not fire, of merchandise and property. Such damage is covered by the fire policy.

Special Damages
Actual loss from the natural, not the necessary, consequences of the subject of complaint; e.g., specific payments for medical bills or car repairs. In third party claims, it means the damages that may be proved with documents.

Special Multi-Peril Policy
This basic policy contains declarations, general provisions and definitions applicable to the four principal sections of coverage; property, liability, comprehensive crime, boiler and machinery. The particular coverage requirements for each are handled by separate forms attached to the basic contract.

Spontaneous Combustion
Self-ignition of combustible material through chemical action of its parts.

Sprinklered Risk
Property protected against fire by a system of overhead pipes with regularly spaced heads designed to melt at the heat of a fire, thus releasing water for extinguishment.

Statement of Claim
A written statement by a plaintiff detailing the facts which support the claim against the defendant and the relief sought.

Statement of Values
The information required when a single rate is to cover more than one item or building. To determine a correct average, the rating bureau requires the policyholder to give the value of each separate risk and its contents.

Statute
An act of the legislature. Common law is made up of the various court decisions over the years. Case law may be altered by statute.

Statute of Limitations
Law determining the period within which a specific legal action must be taken.

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

Stock
Merchandise for sale or manufacture, as distinguished from furnishings, fixtures or equipment.

Stock Company
A company owned by a series of investors or stockholders (shareholders) who assume the risks of profit or loss.

Storage
A term applied to articles or substances held for safekeeping. If storing of such articles is prohibited by a policy, the policy will be voided if loss consequently occurs, unless the company's permission and consent has been specially granted.

Structured Settlement
A financial package permitting a settlement to be paid in regular installments either for a fixed period or for the lifetime of the claimant. Because it is tailor-made for individual cases, the structure may also include some immediate payment to cover special damages. The payment is usually made through purchase of an annuity from a Life Insurance Company.

Subcontractor
A trade contractor such as a roofer who usually subcontracts with a general contractor.

Subrogation
Once a company has paid a loss for which someone other than the policyholder is responsible, it may have the right to recover this loss from the guilty party. This right is called subrogation.

Subscription Policy
A single policy covering a risk that is divided among a number of insurers; the policy is issued by the "lead" company (usually the one with the largest percentage) and signed by all participating companies.

Suit
A legal proceeding brought by one person against another.

Sum Insured
The amount for which insurance is effected and the one on which the premium is based. Often in life insurance, the term is "sum assured."

Superintendent Of Insurance
The chief officer of the Government Department which regulates insurance.

Surrender
Cancellation of a policy before its normal expiry by mutual consent of insured and insurer.

Tenant's Policy
A package policy specially designed to meet the normal insurance requirements of a private tenant covering personal belongings and liabilities.

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

Theft
The wrongful taking of the property of another. It is a broad term and includes larceny, pilfering, hold-up, robbery and pick-pocketing.

Third Party
A claimant under a liability policy, so called because he is not one of the two parties (insured and insurer) who has entered into the insurance contract which pays his claim.

Third Party Insurance
A fire policy insures the policyholder against loss or damage to his own property. When a policy insures a person against the liability he may incur to another for damages, it is "Third Party Insurance." The insured is indemnified with respect to any loss which he might suffer as a result of his legal liability to others arising out of the peril against which insurance is written.

Title
The right to ownership of property. The owner of real property having just possession of his property.

Tort
A legal wrong arising from a duty fixed by law. Breach of this duty causing injury to persons or property is repressible by legal action for damages. Liability for tort involves private or civil wrong or injury and is distinct from that under contract in that the duty is owed to people, generally, rather than to a specified individual.

Total Loss
Loss of all the insured property. Also a loss involving the maximum amount for which a policy is liable.

Trespass
An illegal act against another person's rights or property.

Umbrella Policy
A special form of liability policy designed to protect the insured for certain unknown contingencies over and above coverages and to provide excess insurance.

Umpire
A third person appointed to decide an arbitration.

Underwrite
To insure. More commonly, to scrutinize a risk and decide on its eligibility for insurance.

Underwriter
1) The insurance company or group that underwrites or insures a particular risk.
2) The individual within an insurance company whose responsibility it is to accept or reject business in the particular line in which he/she specializes and in this way chooses risks his/her principals are prepared to underwrite.

Underwriters' Laboratories of Canada (U.L.C.)
An organization financed by stock insurance companies whose purpose is fire prevention and safety. It provides testing laboratories for various manufactured items and approves those that are acceptable. Labels issued by the Underwriters' Laboratories are evidence to the public that the particular item meets the safety standards.

Unoccupied
Where the premises contain contents but no human beings, such persons being temporarily away from the premises, on vacation for example, the premises are said to be unoccupied. This is distinguishable from Vacant in that in vacancy, the contents have been moved out leaving nothing but the building.

Unprotected
A property located in an area not regularly serviced by a fire department.

Utmost Good Faith
A phrase in a legal document calling for the highest standards of integrity on the part of the insured and the insurer. See also Uberrimae Fidei.

Vacant Building
A building with no occupants or furnishings. See also Unoccupied.

Valuation
An estimate or the act of assessing of value. This will frequently be done through the process of an appraisal.

Valued Policy
A policy which provides that a special amount shall paid in the event of a total loss of the property.

Vicarious Liability
Liability imposed upon a person even though not a party to a 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.

Void
1) Invalid, not legally binding.
2) An insurance contract that is prohibited by law and thus cannot be held to be a valid contract.

Waiting Period
The time which must elapse before an indemnity is paid.

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

Warranty
Statement or stipulation in a contract, the breach of which nullifies the contract.

Warranty (Implied)
A warranty assumed to be a part of the insurance contract even though not expressly included.

Water Damage Clause
A Portion of the policy affording coverage for certain specific causes of water damage.

Windstorm Insurance
Protection against damage done to property by unusually high winds, cyclones, tornadoes or hurricanes. This coverage is available under the extended coverage endorsement of property policy.

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

Writ
A Court document commanding the defendant to enter an Appearance within a specified number of days if he wishes to dispute the claimant's claim.