Home Insurance

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A

Act of God

A natural occurrence, without human involvement, that could not have been prevented. Examples include floods, lightning strikes, earthquakes, tornadoes and hurricanes.

Actual cash value (ACV)

The cost to replace lost or damaged property, less depreciation or, in some cases, plus any appreciation.

Additional living expenses

If an insured loss requires that you temporarily live outside of your home while repairs are being made, the additional costs you incur are covered. Examples include hotel accommodation, restaurant meals and laundromat use - costs that you would not have had if you were still able to live in your home.

Adjuster

A licensed person employed by an insurer to evaluate the merits of a claim, determine the amount of loss or damage, and make recommendations regarding settlement.

Age

For insurance purposes, age means the full number of years since birth at the start of insurance coverage.

Alarm system

Some alarm systems are “local”, meaning they only alert people in the building. Others are “monitored”, meaning that they are connected to a central agency where someone can respond. Some insurers offer discounts for certain types of burglar and fire alarms.

All perils

Also known as "all risks," this means your contents are insured for every type of loss, unless it is specifically excluded from your policy.

Appreciation

An increase in worth or value.

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B

Broad form

Insurance coverage that protects you from most risks (subject to limited exclusions) to the building, and named perils to the contents.

Building coverage

Your house and any other buildings on your property like a garage or garden shed, are covered as long they are not used for business.

Burglary insurance

Insurance covering property damage and financial losses caused by someone entering your household premises or automobile by force. The theft must be reported to the authorities.

Business personal property

This refers to items or contents owned by your business or employer. Examples of this include a laptop or digital camera, which you bring home.

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C

Cancellation

The termination of an insurance contract by either you or your insurer in accordance with the contract provisions and provincial laws.

Certificate of insurance

A document listing your coverage, which includes the name of the insurer, the policy period and the limitations of coverage.

Claim

Your notification to your insurer for reimbursement due to a loss from an insured peril.

Combination furnace

A furnace that can burn more than one type of fuel.

Comprehensive

Insurance coverage that protects the policyholder from all risks to the building and contents except for those that are specifically excluded.

condo, condominium

Units that are owned by individuals and managed by a condominium corporation.

Contents

This includes furniture, appliances, computers, home entertainment equipment, drapes, linens, and all the usual things you own, wear or use to maintain a household.

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D

Deductible

A pre-agreed amount that you are responsible for before your insurer will make any payments. Increasing your deductible will decrease your insurance premiums.

Depreciation

A decrease in value of tangible items over a period of time, according to a predetermined schedule.

Detached private structure

A structure on your property that is not connected to your primary residence, such as a detached garage or garden shed.

Direct loss

The loss or damage of insured property, not including other indirect losses or expenses such as having to rent a video camera if yours is stolen shortly before you leave on a vacation.

Dwelling

The premises where you reside.

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E

Effective date

The date your insurance policy goes into force.

Endorsement

Also referred to as an option, an endorsement is a written agreement attached to your insurance policy, which adds or subtracts insurance coverage or conditions. This attachment takes precedence over the provisions in your original policy.

Electrical system

This refers to the wiring, circuits and switches inside your house.

Expiration notice

A written notice to you indicating the date of termination of your insurance policy.

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F

Finished basement

Any room or rooms located below ground level, which have been converted to living space.

Fire hall

A building that houses fire-fighting equipment and has fire fighters on site or on call. Your home's distance from a fire hall helps to determine how quickly a fire could be extinguished.

Fire hydrant

An upright device for drawing water to use in fighting a fire. Your home's distance from a fire hydrant helps to determine how quickly a fire could be extinguished.

Fire insurance

Insurance specifically to cover damages caused by a fire including lightning strikes and explosion of specified gases.

Fire resistive construction

A type of building construction using materials that resist combustion in the roof, floors and exterior walls.

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H

Heating sources, additional

Any additional heat sources used in certain rooms or areas to supplement a home's main heating system.

Heating system

The main source for heating your home.

Homeowner's policy

A policy designed to cover the various risks of a homeowner in one policy.

House

A detached house, townhouse or any other residential building.

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I

Indemnity

Compensation for your loss. This may be a monetary value or replacement of the loss. Indemnity will put you in the same financial position you were in immediately prior to the loss.

Insurance broker

A registered insurance broker is an independent insurance professional who sells general insurance including coverage for your home, business, automobile, boat, etc. They offer product choice from a variety of companies and offer independent advice. PC Financial Insurance Broker Inc. is one such broker.

Insurer

The party in an insurance contract that agrees to reimburse the insured if a specified loss occurs.

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L

Lapse

The termination of an insurance policy at the renewal date or for non-payment of premium.

Legal liability

If someone is hurt while they're in your house or on your property, or you accidentally injure someone or damage their property, you could be sued for damages. Legal liability covers the costs associated with these types of lawsuits. See your policy documents for more details.

Limited homeowner's policy

Also known as a named perils homeowners policy, this type of coverage can be issued in cases where you might not qualify for regular homeowners insurance.

Living expenses

If your insured home has been damaged and you can't live in it while it's being rebuilt or repaired, your expenses for temporarily living away from home are covered. Examples include hotel accommodation, restaurant meals and laundromat use - costs that you would not have had if you were still able to live in your home.

Loss

When your insured property has been damaged in any way, it is called a loss. A loss is usually the amount sought in a claim.

Loss of use

This refers to your inability to use any item of property. Loss of use insurance covers such things as additional living expense, business interruption and rental reimbursement.

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M

Material fact

Any information provided in your insurance application that directly affects your eligibility for coverage, price of coverage or conditions for acceptance.

Misrepresentation

Incorrect statement of material fact.

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N

Named-perils policy

Named-perils policy are the things that an insurance policy specifically covers, such as fire, theft and water damage. Perils that are not named in a named-perils policy are not covered.

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O

Obsolescence

The decrease in the value of your assets over time due to newer technologies. This factor is used to determine the amount of depreciation in determining the actual cash value of your damaged property.

Optional coverage

Coverage that is not included in your basic insurance package and for which an additional premium may be charged . Also referred to as endorsement.

Outbuildings

Other private use buildings located on the same property as your residence. For example, a detached garage, shed or pool house.

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P

Personal effects

Also known as personal property, these are personal items that you normally wear or carry with you, which means they could be lost or damaged while you are temporarily away from your home. Such items are usually considered to be part of your household contents, and are covered no matter where in the world the loss occurs. Any personal property that is not normally kept at home, for example items stored in a warehouse, may not be covered.

Personal liability insurance

If someone is hurt while they're in your house or on your property, or you accidentally injure someone or damage their property, you could be sued for damages. While most insurance policies have liability coverage up to a set amount, it is sometimes a good idea to increase the amount with optional personal liability insurance, which is also called umbrella insurance.

Plumbing system

The complete system of water pipes and fixtures inside your house, including sewage disposal drains.

Policy

A written document (including the application) that serves as proof of an insurance contract. The document contains the relevant facts about the policyholder, the insurance coverage, the insured and the insurer.

Policy term

The period of duration in which your insurance policy is in force. Usually one year.

Policyholder

The person who owns an individual insurance policy.

Premium

The amount you pay for insurance coverage of a specified type and for a policy term.

Premium notice

Our notification to you that a premium payment is due on a given date.

Principal dwelling

Dwelling occupied year round and not vacant for more than 30 days.

Property deed

An official document that proves your ownership of your home.

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R

Reinstatement

The restoration of a lapsed or cancelled policy.

Renewal

A renewal is an extension of a policy term for an additional policy period as the current policy is about to expire.

Replacement cost

The amount required to replace your damaged property with things of like kind and quality.

Replacement value

See replacement cost.

Rider

Another name for an endorsement or scheduled article.

Risk

An unexpected and accidental chance event that causes damage, destruction or property loss. Also known as peril.

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S

Scheduled articles

Certain valuable items would have a maximum replacement value under your homeowner's insurance policy unless they are specifically listed, along with their actual approximate value. Examples of such items include jewellery, furs, fine arts, bicycles and other sports equipment, stamp and coin collections, and cameras. Once they are listed as scheduled articles, they are covered for full replacement value and there is no deductible for these items if you make a claim.

Seasonal dwelling

Generally, a dwelling that is occupied only for a portion of the year, such as a ski chalet or summer cottage.

Secondary dwelling

Generally, a dwelling that is occupied intermittently over the course of a year, with the unoccupied stretches lasting not more than 60 consecutive days at any one time.

Specified perils

Also called named-perils, these are the things that a particular insurance policy will specifically cover, such as fire, theft and water damage. Perils that are not named in such a policy are not covered.

Subrogation

This is the official term if your insurer tries to recover some or all of the costs of settling your claim by suing others responsible for the loss. When this happens, you are usually compensated more quickly than if you sued the responsible person yourself.

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T

Tenant

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

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U

Underwriting

The process of reviewing, accepting or rejecting insurance risks. Accepted risks are categorized so that the appropriate premium can be charged.

Umbrella insurance

This is another name for personal liability insurance. It is optional insurance on top of your existing insurance in case someone sues you because they've been accidentally injured, or their property damaged, and they want to hold you responsible for any costs. Typical examples would be someone slipping on your front steps and suing for the resulting lost wages, or someone's valuable antique being accidentally broken by your child and you're sued for the cost of replacing it.

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V

Voluntary medical payment

If you feel responsible for someone's injury and wish to compensate them without proof of legal responsibility, you can request that your insurer make a voluntary medical payment. This limited amount payment is considered to be a claim.

Voluntary property damage

If you feel responsible for damage to someone else's property and wish to compensate them without proof of legal responsibility, you can request that your insurer make a voluntary property damage payment for repair or replacement of that damaged property. This limited amount payment is considered to be a claim.

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