Glossary: Home Insurance Terms

Insurance-speak can be complicated. Unless you’re fluent in the intricacies of indemnities or subrogation, it can be difficult to decipher what your policy means. That’s why we’ve put together this handy glossary of insurance terms, with definitions that are easy to understand. That way, we know that when it comes time to talk about insurance, you’ll be ready.

Actuary

This is someone who assesses risk and determines how likely certain events are to happen and, as a result, how much insurance premiums should cost.

Advisor — Insurance

Advisors are on the front lines, working directly with customers to provide advice and guidance on what insurance policies are available as well as what policy makes the most sense for each person, group or family.

Appraisal

This is the process of assessing an item’s worth, including the cost to repair or replace the item. For example, if you have an engagement ring, you can get an appraisal from your jeweller to determine the value of your ring.

Binder

A temporary or preliminary agreement which provides insurance coverage until a final and complete policy can be written or delivered.

Building Code

A set of rules that specify construction, repair and replacement standards for buildings and structures.

Top

Claim

This is the factual information you submit to us after experiencing damage to your home and/or belongings. It’s needed for us to validate your coverage and work on approving your compensation for that loss. It’s also the factual information you submit if you accidentally cause damage or harm to someone else or their property.

Coverage¹

This refers to what your insurance policy will specifically cover if your property gets damaged, or if someone gets hurt (for example, slips and falls) while on your property and brings a legal action for damages against you.

Coverage – Additional Living Expense

This will help you pay for reasonable and necessary additional expenses (like hotel costs) in the event you’re forced to leave your home for a period of time due to a covered damage or loss.

Coverage – Claim Forgiveness Enhancement

This means we won’t increase your renewal premium just because you’ve filed a home insurance claim. The Claim Forgiveness enhancement can be added to your home coverage for an extra cost.

Coverage – Condo Insurance

This simply refers to a policy that offers condo coverage.

Coverage – Direct Damage Policy

This means that coverage under the policy is limited to the direct physical damage to your property.

Coverage – Extended Water Damage

This is extra coverage that financially protects you for loss or damages caused by water damage due to events like a sewer system backup or fresh water flood.

Coverage – Extensions of Coverage

Because the base policy typically doesn’t include everything, extensions are included to provide additional coverages to the policy for specific property or circumstances (with limits in most cases).

Coverage – Family Coverage

This coverage provides additional protection against cyberbullying for children attending school and for parents’ property and liability when living in a care facility within Canada.

Coverage – Insured Perils

This refers to the risks (perils) that can cause loss or damages to your property – fire, lightning, windstorms, hail, and more. It also refers to losses that are specifically covered under your particular policy.

Coverage – Loss Assessment

Loss Assessment is insurance coverage for condo owners which provides protection in the event there is a covered loss to a common area in your building and your condo corporation doesn’t have adequate insurance to cover it. If you’re asked by the Condo Corporation to cover your share of a loss assessment (a.k.a. "special assessment"), then your insurance will cover it, up to your policy limit for loss assessments.

Coverage – Replacement Cost (Also known as Actual Replacement Value) This is the cost to repair or replace your home and/or belongings with material of similar kind and quality without deduction for depreciation as a result of a covered loss.

Coverage – Seasonal Dwelling (Also known as a secondary dwelling) This is coverage that would protect a vacation home, like a cottage, cabin or chalet, that is not occupied throughout the entire year.

Coverage – Tenant Insurance (Also known as renter’s insurance) This is like home insurance but for people who don’t own the property and are renting from someone else. It provides coverage for the renter’s belongings, liabilities and additional living expenses due to an insured loss or damage.

Top

Declarations — Coverage Summary Page

This is a term used in insurance that describes the portion of the contract which contains all the basic information that defines the policy. These declarations include everything from the name and address of the insured to the types and limits of the coverage that has been purchased.

Deductible

This is the amount you agree to be responsible for if you receive an insurance payout for a covered loss or damage. The lower your premium, the higher the deductible you’ll have to pay.

Endorsement

An endorsement is a document that reflects and acknowledges a change in the standard policy coverage. An endorsement can add, modify or remove coverage.

Exclusions

Some perils or sources of damage aren’t covered by an insurance policy, like mold damage or wear and tear. These are called exclusions and are specifically indicated in your insurance policy.

Fair Rental Value

This is the amount of rent you will lose if the dwelling you rent to others is damaged by an insured peril. For example, if you are renting a house to others and there’s a fire, you are no longer able to collect rent while it’s being repaired.

Home Claims Submission Form

This is a covenient, secure and easy way to start your claim through our mobile app. We will contact you within 1–2 business days. Please note that in the case of an extreme weather event, we may be delayed in contacting you due to a high volume of claims. Another way to get to this form to start your claim is through our mobile app or by calling 1-866-454-8910.

Indemnity

This is the amount we pay to repair or replace the damage when there is a covered claim.

Top

Lapse

This is when an insurance policy term expires and the policy is not renewed for a future term.

Limitation Period

This is a set period of time in which you can take legal action against an insurance company for a fault or contractual breach. Depending on which province you live in, this time period can vary.

Mortgagor

A person who takes a loan from a lender and who offers his property as a security for repayment.

Negligence

This is failing to use reasonable care when doing an activity that results in property being damaged or a person being injured.

Top

Perils

Perils are the forces or events that can cause damage to the things you’ve insured. They range from common natural disasters (like lightning, wind or hail) to rare events (like earthquakes).

Policy

This is a contractual document that details the terms and conditions of your insurance coverage.

Policy Period

The policy period is the time during which your policy coverage is effective. Typically, this period is for one year.

Pre-Loss Condition

This refers to the state of your property or possessions prior to them being damaged or lost.

Premium

A premium is what you pay to purchase insurance and is based on several factors, like where you live, the coverage you choose, industry related factors and your past claims experience.

Risk

This represents the probability of an uncertain and fortuitous loss, damage, injury or liability occurring.

Scope of Repairs

A list that identifies any loss-related damages to your home or belongings that need to be repaired or replaced due to a covered claim.

Special Limits of Insurance

This refers to specific limitations within your insurance policy that state the maximum amount that will be paid out for certain items on a per-claim basis.

Subrogation

When an insurance claim involves a loss to you caused by a third party, an insurance company has the right to pursue legal action on your behalf to recover, from the third party, the amount paid to you.

Tenant

Someone who pays rent for the home in which they live.

Top

We’re here to help you through any home insurance claim, and you can start your claim through our mobile app.

To access your policy, please go to MyInsurance or contact one of our advisors for help with your policy.