Glossary of Terms

The definitions appearing in this Glossary are provided solely for general informational purposes. They are not intended to be complete descriptions of all terms, conditions and exclusions applicable to the products and services defined. As well, in the case of any inconsistency between the definitions in this Glossary and the definitions appearing in the actual policy, the definitions contained in the actual policy shall govern.

A
ACCIDENT

An unexpected event, which happens by chance and is not expected in the normal course of events.

ACT OF GOD

A sudden and violent act of nature, which could not have been foreseen or prevented. Examples: flood, earthquake.

ACTUAL CASH VALUE

The current cost of replacing an article with a similar one in the same condition. Any item has three basic values: original cost, actual cash value, and replacement value. For example, if you originally paid $400 for your living room couch; its actual cash value might be $175. But if it's destroyed in a fire, replacing it will cost you $800.

ADDITIONAL INTEREST INSURED

Another person or company who may be liable for an accident involving an insured or an insured vehicle and who has been named as an Additional Interest Insured under the policy.

ADDITIONAL PREMIUM

An extra charge for an alteration, during the policy period, which increases the hazard or the Company's liability.

ADJUSTER

A person who investigates a loss and negotiates settlement with the claimant on the Company's behalf.

ALL PERILS

An optional coverage designed to provide protection for your vehicle for all types of losses except those specifically excluded in your policy. All perils coverage is the most complete coverage you can select to protect yourself from loss or damage to your own vehicle. This coverage is optional and may be purchased in addition to the mandatory coverages required by law, and it is subject to a deductible.

ALL RISK

Coverage against loss or damage from all perils except those specifically excluded.

AMOUNT OF RISK

The Company's total liability at a specific location.

APPLICATION (APP)

A form on which the prospective insured states facts requested by the insurance company and on the basis of which (together with any information from other sources) the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk.

APPRAISAL

A valuation of property made for determining its insurable value or the amount of loss sustained.

ARSON

The willful and malicious burning of property.

ASSUMED LIABILITY

Liability, which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.

ASSURANCE

Same as "insurance".

ASSURED

Same as "insured".

ASSURER

Same as "insurer" (insurance company).

AUTHORIZATION

The power or right to act on behalf of another.

AUTOMOBILE INSURANCE

Coverage on the risks associated with driving or owning an automobile. It can include collision, liability, comprehensive, medical, and uninsured motorist coverages.

AVOIDANCE OF RISK

Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure.

B
BASIC RATE

The standard charge for a given type of risk.

BI/PD

Bodily Injury / Property Damage Liability Coverage.

BINDER

A temporary or preliminary agreement, which provides coverage until a policy can be written or delivered.

BODILY INJURY

Term used in Auto and Casualty policies meaning physical injury, including sickness, disease, mental injury, shock or death.

BODILY INJURY LIABILITY

Pays when an insured person is legally liable for bodily injury or death caused by your vehicle or your operation of most non-owned vehicles. This coverage also pays for your legal defense if you are sued.

BROAD FORM

Any of the commercial or personal lines property forms which provide coverage on a named perils basis. This form normally adds the Extended Coverage and Vandalism and Malicious Mischief coverages. This form is generally used for coverages on a Homeowners Policy

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