Car Insurance Terms Explained

Let’s be honest. Car insurance terms aren’t always easy to understand. Whether you’re thinking of submitting a claim, trying to understand the process, regulations, or your policy, sometimes the terms used can have you scrambling for a dictionary.

We believe insurance doesn’t need to be so complicated. That’s why we’ve prepared a helpful glossary of words you may come across in your insurance experience and have broken them down into less insurance-y terms. That way, when it comes time to talk about car insurance, you’ll feel confident.

A Car Insurance Term Glossary

Accident Assistance: A helpful button found in your TD Insurance Mobile App that you can use to instantly call for a tow truck and start a new claim. You'll be connected quickly to our First Response Centre.

Accident Forgiveness: Sometimes referred to as 'Claim Forgiveness', it's a product offered where we agree not to adjust your insurance premium after your first accident if you’re considered at-fault or partially at-fault.

Actual Cash Value: The current market value of your car before it was damaged.

Additional Driver: Anyone that's allowed to drive your car (other than you), including family members and friends. You can include these people on your policy.

Adjustor: Sometimes referred to as an 'advisor', they're a dedicated professional we assign who is experienced in gathering facts about your car, coordinating an appraisal, and determining the dollar value of the car or settlement based on an assessment of the damage or loss.

At-Fault: After an accident and depending on the details of how the accident happened, you can be found anywhere between 0% and 100% at fault. Anyone considered to be 1% or more at fault in an accident will have an at-fault accident listed on their insurance record. The way the amount of fault is decided can vary from claim-to-claim. Certain provinces have guidelines for determining fault, and depending on the circumstances and evidence, the determination can vary.

Auto Claims Tracker: A feature that lets you track the status of your claim. Once you open your claim with us, you can securely follow your claim across the five key stages with the TD Insurance Mobile App or online with MyInsurance . You'll also get status updates from your dedicated advisor through email or text, depending on what you opt in for.


Claim: This is what you submit to us after experiencing damage to or loss of your car in order for us to validate and approve to indemnify you for that loss. It's also what you submit if you cause damage or harm to someone else or their property.

Coverage - Accident Benefits: Expenses (medical or otherwise) covered in an accident regardless of who’s at fault. These might include things like medical care and income replacement.

Coverage - All Perils: Optional coverage that covers all causes of loss except those directly mentioned as exclusions in your policy. All perils coverage also covers loss or damage in the event your car is stolen or if it’s damaged by an additional driver or someone in your household.

Coverage – Bodily Injury: Protection against liability for damage to property of another, including loss of use of the property.

Coverage - Collision: Optional coverage for your car that takes care of the cost of repair if it’s hit and/or damaged by a collision or upset with another object. With this coverage, we take on the cost of repairs to fix your car, minus the amount you pay as your deductible.

Coverage - Comprehensive: A coverage package for your car that takes on Specified Perils, like hail, flood, theft or fire, to name a few (see ‘perils’ definition). This does not include coverage provided by Collision Coverage.

Coverage - Direct Compensation: Coverage that provides compensation for your car and its contents if another person was at-fault, where you collect directly from your own insurer.

Coverage - Family Protection: This feature extends your coverage to not only include yourself, but also family members too up to the limit of your liability coverage. This type of protection can be helpful if you’re in an accident with someone who only has the minimum amount of liability insurance. Family protection is standard in car insurance policies in Canada, except in Quebec where it’s not an available option.

Coverage - Grand Touring Solution® : This is a product we offer as an optional travel-minded insurance feature offered for those who drive in Canada or the US that provides coverage if you find yourself in an accident, if your car has been stolen or vandalized, if a natural event damages your car, and more. Coverage is also offered for damages to rented or borrowed cars, and provides a hit and run deductible waiver and reimbursement for emergency road services you might need.

Coverage - Limited Glass: The coverage on your car’s windshield and glass, even if you have comprehensive coverage. Selecting limited glass coverage still provides some coverage if your glass is damaged in theft or act of vandalism, but cracks and chips from use aren’t covered.

Coverage - Liability: The mandatory insurance coverage that protects you from being held personally responsible for damages and injuries to a third party or a third party's property. Your level of liability coverage depends on your policy and you can purchase additional liability coverage for several different scenarios. For example, you could purchase civil liability coverage, so you're covered for damage caused to another person by an insured car.

Coverage - Limited Waiver of Depreciation: An optional coverage that typically allows you to receive the actual purchase price of the car in the event your car is considered a total loss 1 . Coverage is valid for 36 months from the original delivery of your vehicle.

Please note, in Ontario this coverage is known as Removing Depreciation Deduction. In Quebec, this coverage is known as Waiver of Depreciation.

Coverage - One-Way Insurance: A very basic brand of car insurance that only includes liability coverage and does not provide coverage for damage to your vehicle.

Coverage - Perils: Specific risk or situation covered by your insurance policy. Perils include things like fires, floods and theft.

Coverage – Property Damage: Protection against liability for damage to property of another, including loss of use of the property.

Coverage - Specified Perils: Also known as named perils, these are the types of damages that are directly mentioned in the text of your policy and thereby covered. For example, your policy may name specific perils, such as:

  • Fire
  • Theft or attempted theft
  • Lightning
  • Windstorm
  • Hail
  • Rising water
  • Earthquake
  • Explosion
  • Riot or civil disturbance
  • Falling or forced landing of aircraft or parts of aircraft, or the stranding, sinking, burning, derailment or collision of any kind of transport

Coverage - Uninsured Automobile: A feature where repairs, injuries, or death would be covered (a deductible may apply based on your coverage and based on the laws of the province where the accident occurred) in the event you are involved in an accident with an uninsured driver, or a driver who commits a hit-and-run offense


Deductible: The amount of a claim that you’re responsible for paying up front, regardless of who’s at fault. When you file an insurance claim, the deductible is the previously agreed-upon amount you must pay before your insurance plan starts to pay. This amount may be refunded if you are found to be not at fault and the other party involved in the accident meets the necessary criteria.

Depreciation: Depreciation is the decrease in value of an asset over time. When it comes to the depreciation of your car, it begins after it leaves the dealership and continues as it ages.

Excluded Driver: Any driver that is not covered by your policy, or driver(s) that are specifically excluded from being covered and cannot use your car. This can help if you're looking to exclude a young driver or a driver with an at-fault from using your car to avoid higher premiums.

Exclusions: Situations not covered by your insurance policy. For example, vermin, rodents, and wear and tear are all typical “exclusions.”

First Party: First party coverage is the compensation you'd receive under your own insurance policy.

Indemnity: The agreement between two parties that confirms we will compensate you for losses or damages caused by another party. This compensation is here to help get you back to where you were financially for any expenses caused by the incident.

In Force: An active insurance policy. If your policy isn’t expired or cancelled, it’s considered to be in force.

Insurable Interest: Insurable interest is established by owning, possessing, or having a direct relationship with the car. It applies if you have a vested interest, financial or otherwise, in the car and would experience a loss (financial or otherwise) in the event it is damaged.

Lessee: A person that's leasing a car. An accident or claim could impact the lessee from both an insurance premium and a liability standpoint.

Lessor: The company or car dealership that provides you with your lease.

Lienholder: The lender that technically owns your car and has either leased it to you with an insurable interest or provides you the money or loan to purchase it. They remain the lienholder until the lease is repaid.

Limitation Period: The period of time within which you can take legal action against the insurance company. The amount of time varies for each province and territory.

Locator Tool: A feature on the TD Insurance Mobile App that helps you easily find a TD Insurance Auto Centre or TD Insurance Preferred Vendor near you.


Named Insured: The person, firm, organization, or any of its members specifically designated by name that is mentioned in an insurance policy and is directly covered by that policy.

No Fault: A system where the insurance claims are handled by each party's insurance companies regardless of who is at fault in a car accident. Instead of dealing with the other driver, you'll be dealing with us directly to handle injuries, damages and claims. Although the term includes the words no fault, you could still be found fully or partially at fault for the accident. This system is only used in Ontario, Quebec, New Brunswick, Nova Scotia, and PEI.

Premium: What you pay to purchase insurance. You may be provided with options to pay your premium on a monthly or annual basis. We also make easy to set-up pre-authorized payments from your chequing account and credit card.

Registered Owner: The person that’s identified in the registration information as the owner of the car. In more technical terms, this is who has the right of possession of the car (unless they have leased the car to a lessee, who would then have possession rights).

Reporting Lag: The period of time between the accident occurring and the accident being reported to us. This term is used when there’s a lengthy delay between the accident and it being reported. For us to review a claim it needs to be reported within seven days of the incident.

TD Insurance Auto Centres: Innovative auto shops which provide a unique and holistic experience for TD Insurance customers. You can have an advisor walk you through your claims experience, have your car repaired by Certified Repair Technician and get a rental car, depending on your coverage.

Third-Party Liability: You’re considered legally responsible if someone causes injury or damage when using your car, even if you’re not present at the time of the accident. It also covers legal responsibility if damage or harm occurs to a third-party while you're driving the car.

Two-Way Insurance: Provides greater coverage since it covers damage you may cause, and damage to your own car. This applies for things like rollovers, collision, theft, vandalism, hail, or fire. This should be read with the definition of "One Way coverage" (described above).

Write-Off: Also known as a total loss, this is when the repair cost of your car is valued higher than the actual car itself prior to the incident that caused damage or loss, after subtracting recycle or salvage value. In these cases, you'll typically be offered a settlement based on your policy coverage.


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As of January 30, 2020, our customers (with insurance policies underwritten by either Security National Insurance Company, Primmum Insurance Company, TD General Insurance Company and TD Home And Auto Insurance Company) who insure their car with us and who meet the claims-free savings criteria applicable to their province or region with regard to the number of years spent claims-free, save an average of:

30%, in Ontario
18%, in Quebec
20%, in Alberta, Yukon, Nunavut and North West Territories
30%, in the Atlantic Provinces

when compared to the premium they would have paid if, within the previous 12 months, they made a claim that would have negatively affected their premium. These claims vary by province and product. Savings are not guaranteed and vary based on the customer's profile, province/region and product.

1This coverage is available June 10, 2021. In the event of a total loss, we will pay the lowest of the following amounts:
  • The actual purchase price of the vehicle and its equipment;
  • The manufacturer's suggested listed price of the vehicle and its equipment on the original date of purchase; or
  • The cost of replacing the vehicle that is a total loss with a new vehicle with similar specifications or equipment and accessories

Mailing address:
TD Insurance (Corporate Secretariat)
50, Place Crémazie
12th Floor
Montreal (Quebec) H2P 1B6