Homeowners Definitions

Question 1

Property insurance

Answer 1

First-party insurance that idemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion

Question 2

Personal-lines insurance

Answer 2

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

Question 3

Fire insurance

Answer 3

Coverages for losses from fire, lightning, and limited explosion and also the resultant damage caused by smoke and water. Usually supplemented by extended coverage insurance

Question 4

Fire

Answer 4

Combustion manifested in light, flame, and heat for useful purposes (friendly fire) or destructive purposes (hostile fire)

Question 5

Extended coverage insurance

Answer 5

An endorsement that enlarged the coverage afforded by the primary policy. Coverages such as windstorm, hail, smoke, and riot are extended coverages on fire policy

Question 6

All-risks policy

Answer 6

A name given to an insurance policy that covers each and every loss except for those that are specifically excluded. If the insurer does not exclude it, then it is automatically covered. This is the broadest type of policy that can be purchased

Question 7

Exclusion

Answer 7

Risks, perils, or properties defined in the policy as not covered

Question 8

Statutory conditions

Answer 8

Special prescribed and standardized conditions that the provincial and territorial insurance acts require to be included in insurance policies

Question 9

Liability insurance

Answer 9

Insurance that agrees to indemnify the insured for suns he or she may be required by law to pay to third parties as damages to property. The maximum amount of insurance provided under a policy of liability insurance

Question 10

Dwelling

Answer 10

A shelter intended or used as a space in which people live

Question 11

Detached private structures

Answer 11

Structures or buildings separated from a dwelling by a clear space, on the premises but not insured as a dwelling building. Normally if these structures are connected to a building by a fence, utility line or similar connection, they are considered to be detached; for example a detached garage

Question 12

Specified perils

Answer 12

Perils insured against that are specifically named in a policy; losses resulting from the perils listed are covered under the policy. This is the flip side of all risk coverage, where losses resulting from the perils listed are excluded

Question 13

Deductible

Answer 13

An agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insurer and the insured. An insureds obligation to pay a deductible is not based on whether the insured is at fault

Question 14

Inherent vice

Answer 14

A quality within an object that makes it tend to destroy itself

Question 15

Business

Answer 15

Any continuous or regular pursuit undertaken for financial gain, including a trade, profession, or occupation.

Question 16

Vacant building

Answer 16

A building where all occupants have moved out with no intention to return, or where no new occupant has moved in. The building may or may not be furnished.

Question 17

Earth movement

Answer 17

A general term that includes earthquake, landslide, snow slide, and volcanic eruptions, among other phenomena

Question 18

Terrorism

Answer 18

An ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or the threat of violence or force, committed by or on behalf of any group(s) for the purpose of influencing any government and/or instilling fear I. The public or a section of the public

Question 19

Builders risk insurance

Answer 19

Insurance coverage on property under construction, including loss to buildings, machinery, and equipment under the course of construction, and materials and supplies incidental to the completion of the construction project

Question 20

Theft

Answer 20

The wrongful taking of the property of another. It is a broad term and includes larceny, holdup, robbery, and pickpocketing

Question 21

Flood insurance

Answer 21

Insurance against damage done by rising or overflowing of bodies of water

Question 22

Coinsurance

Answer 22

A distinct section or provision in an insurance policy that requires an insured (property owner) to carry separate insurance for a specified amount stated in the policy to be eligible for full coverage

Question 23

Scheduled property

Answer 23

Property specifically identified and assigned value individually in a policy covering several items

Question 24

Actual cash value (ACV)

Answer 24

The fair market value of property, taking into account factors that might augment or reduce the value of the property in question. Actual cash value (ACV) is usually calculated in one of three ways: (1) cost to repair or replace less depreciation; (2) fair market value; (3) consideration of all relevant evidence of the value of the damaged property

Question 25

Valued policy

Answer 25

A policy the provides that a special amount shall be paid in the event of the total loss of the property

Question 26

Bylaw endorsement

Answer 26

An endorsement explaining how a particular insurance company deals with a claim that is affected by a local bylaw

Question 27

Sublimity

Answer 27

A limitation in an insurance policy on the amount of coverage available to cover a specific type of loss

Question 28

Identity theft

Answer 28

The fraudulent acquisition and use of a person’s private identifying information, usually for financial gain

Question 29

Tenants policy

Answer 29

A package policy specifically designed to meet the normal insurance requirements off a private tenant covering personal belongings and liabilities

Question 30

Peril

Answer 30

The event that caused a loss covered by the policy; for example, fire, windstorm

Question 31

Additional living expense insurance

Answer 31

Coverage applicable under a homeowners, condominium, and renter’s policy that indemnifies the insured for the additional expenses incurred when an insured’s dwelling is damaged by an insured peril to such an extent that one cannot live in it until repaired. This insurance pays the extra amount it costs to live elsewhere until repairs are made, such as the cost of living in a hotel. It usually provides living expenses of 10 percent to 20 percent of the amount of the structural coverage on the home

Question 32

Plaintiff

Answer 32

The party who brings a legal action against another, called the defendant

Question 33

Insured

Answer 33

Any person (including a corporation) covered by an insurance policy. In some policies, the term may be defined exhaustively to limit the coverage or defined broadly to expand coverage

Question 34

Application

Answer 34

A request by an insured for insurance. Applications may be done verbally, in writing, or online. The insured provides information relating to the subject for insurance. The insurer then assesses this information and decides whether to accept the risk for insurance and in the terms of such acceptance

Question 35

Policy

Answer 35

Legally binding contract effecting insurance or certificates thereof, including all clauses, riders, endorsement, and renewals

Question 36

Applicant

Answer 36

The person or firm requesting insurance. That party answers oral questions or completes and signs written forms that contain information to assess the risk

Question 37

Coverage

Answer 37

What an insurance contract covers. Can be used interchangeably with “insurance” or “protection”, as in “fire coverage” or “fire protection “ or “fire insurance”

Question 38

Vandalism and malicious mischief

Answer 38

The wilful injury or destruction of property. Insured against by the extended coverage endorsement of a property insurance policy

Question 39

Condominium

Answer 39

Individual ownership of a single unit in a multi-unit building or group of buildings, including a percentage interest in the part of the total property owned jointly by all owners. Condominium property requires special insurance treatment

Question 40

Condominium unit

Answer 40

The portion of the condominium that is for the exclusive use of the condominium owner, typically residential apartments, storage lockers, and parking spots, as described in the condominium’s declaration

Question 41

Improvements and betterments

Answer 41

Permanent additions or changes made to a building by a lessee, or condominium owner, at his or her own expense that may not be legally removed

Question 42

Depreciation

Answer 42

The reduction in value of property through use, aging, deterioration, or obsolescence

Question 43

Coinsurance clause

Answer 43

A distinct section or provision in an insurance policy that requires an insured (property owner) to carry separate insurance for a specified amount stated in the policy to be eligible for full coverage. If there is insufficient coverage, the insured must pay part of the loss

Question 44

Mobile home

Answer 44

Manufactured housing, commonly called house trailers, usually placed in one location and left there permanently, but retaining the ability to be moved, as required in many areas. Behind the cosmetic work fitted at installation to hide the base, there are strong trailer frames, axles, wheels, and tow hitches

Question 45

Replacement insurance

Answer 45

Insurance coverage that idemnifies for loss or damage to insured property at the current market price rather than at a depreciated value. This, the rating and premium are based on the current cost to replace the insureds policy

Question 46

Seasonal risk

Answer 46

(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

Question 47

Burglary

Answer 47

Unlawful removal of property from premises involving visible forcible entry

Question 48

Glass insurance

Answer 48

Insurance against the breakage of glass. The coverage is usually extended to certain other incidental expenses associated therewithin

Question 49

Collapse

Answer 49

Falling in of a building

Question 50

Endorsement

Answer 50

An amendment added to a written document, particularly an agreement between parties, altering its provisions

Question 51

Unoccupied building

Answer 51

Where the premises contains contents but no human beings; when such persons are temporarily away from the premises (on vacation, for example), the premises are said to be “unoccupied.” This is distinguishable from “vacant”; in vacancy, the contents have been moved out, leaving nothing but the building

Question 52

Pro rata distribution clause

Answer 52

A clause used in a property policy for the distribution of the insurance amount over the several locations of objects covered in proportion to their value