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Do you find insurance terminology too complicated for making smart choices in your insurance products? Here’s a mini insurance glossary that will be very useful in helping you talk the same language as your broker!
1. Endorsement
An endorsement is extra protection that you can add to your basic insurance policy. Depending on your situation, it may be helpful to take out some coverage extensions. For example, do you regularly borrow or rent a car? If so, Endorsement 27 might come in handy.
2. Clause
A clause corresponds to a paragraph in an insurance policy whether for home, car, travel, civil liability or other insured risk. Clauses are provisions that specify the particular conditions of your situation. How? By defining the reciprocal commitments between the insurance company and you, and by indicating how your insurance coverage applies in the event of a disaster, accident or other event.
3. Depreciation
Over time, your property gradually loses its value compared with its purchase price when new: that’s what is called depreciation. In the case of home insurance, depreciation can reduce the amount of your compensation when you make a claim. However, protection options exist to offset the depreciation of certain assets.
4. Outbuilding
Do you park your vehicle in a separate garage? Are your tools well put away in a shed at the back of the yard? In home insurance, the term for these two structures—garage and shed—is “outbuildings.” They are separate from your main residence and not directly connected to it.
5. Exclusion
This term refers to any loss or other event not covered by your insurance policy. Exclusions vary from policy to policy. Take a close look at the exclusions in your policy in order to avoid unpleasant surprises! Check out these explanations to discover what is covered or not in a standard home insurance policy.
An exclusion refers to any disaster or other event not covered by your insurance policy.
6. Deductible
The deductible is the amount that is not reimbursed by the insurer in the event of a claim and remains your responsibility. Have you suffered a loss with $3,000 worth of damage whereas your deductible is $800? If so, your broker will compensate you for the difference between your total estimated loss and your deductible, i.e. $2,200. If the amount of damage is less than your deductible, compensation will be nil. The deductible is an important part of your insurance premium: the higher the deductible, the lower the premium.
7. Compensation
Compensation is the payment made by the insurance company to settle your claim. What’s it for? Insurance compensation is used to repair or replace your property, as the case may be. The amount of compensation and its terms depend on the provisions of your auto or home insurance policy.
8. Policy
In insurance terminology, the policy is simply the insurance contract. It documents the agreement between you and your broker by recording each party’s commitments and obligations, including the deductible amount and other specific provisions. The policy contains a unique number that identifies you in the event of a disaster or loss.
9. Premium
The premium is the amount you pay to protect your property. In the case of home insurance, for example, the premium varies according to such factors as the deductible amount, building characteristics and the selected coverage.
10. Claim
Have you just suffered loss or damage to your property? It’s time to file a claim for compensation with your broker. At this stressful time, it’s sometimes difficult to know exactly what to do. The Chambre de l’assurance de dommages offers a useful summary to help you through the formalities!
A claim is an application for compensation from your broker.
11. Civil liability
Did the babysitter burn herself while preparing your children’s supper? Did your children kick a soccer ball through a window of a friend’s house? Whether inside or outside your home, you’re responsible for the damage that you or your minor children may unintentionally cause to others: that’s what’s called civil liability. Your auto, home and other insurance policies contain specific clauses to cover these risks.
12. Replacement value
Is your home theatre out of commission due to water damage and does your home insurance policy provide coverage for a new replacement? The cost of the affected items will then be reimbursed or the items themselves will be replaced based on their full value as new. Unlike the item’s value on the day of the loss, the amount of compensation will not be reduced to reflect its depreciation over time.
Our brokers know all this terminology by heart and are there to make insurance much clearer for you! Apply for insurance online today and get the best protection for your home or vehicle.