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C12 Insurance on Property Definitions
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1. Property Insur- first party insurance that indemnifies the owner or user of property for its loss, or
ance the loss of its income-producing ability, when the loss or damage is caused by a
covered peril, such as fire or explosion.
2. Insurable Inter- an interest that the insured must have in the subject matter of the insurance
est purchased so that if the event insured against occurs, the insured will suffer an
economic loss.
3. Indemnity a contract, expressed or implied, to repay in the event of a loss. The insured neither
gains nor loses.
4. Contract an agreement or promise between two or more parties that is intended to be
legally enforceable and is constituted by the acceptance by one party of an offer
made by another party, to do or to abstain from doing a specific act. The offer and
acceptance may either be expressed or be inferred through the conduct of the
parties.
5. Contract (Que- an agreement of wills by which one or several persons obligate themselves to one
bec) or several other persons to perform a prestation (that is, a duty, a payment, or a
service).
6. Uberrimae Fiedei of the utmost good faith. The basis of all insurance and reinsurance contracts.
Both parties to the contract are bound to exercise good faith and do so by a full
disclosure of all information material to the proposed contract.
7. Peril the event that caused a loss covered by the policy; for example, fire, windstorm.
8. Deductible 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 insured's obligation to pay a deductible is
not based on whether the insured is at fault.
9. Fire Insurance
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coverage for losses from fire, lightning, and limited to explosion and also the
resultant damage caused by smoke and water. Usually supplemented by extended
coverage insurance.
10. Exclusion risks, perils, or properties defined in the policy as not covered.
11. Flashpoint the lowest temperature at which a liquid gives off sufficient vapours to form an
ignitable mixture with the air.
12. Statutory Condi- special prescribed and standardized conditions that the provincial and territorial
tions insurance acts require to be included in insurance policies.
13. Extended Cover- an endorsement that enlarges the coverage afforded by the primary policy. Cov-
age Insurance erages such as windstorm, hail, smoke, and riot are extended coverages in a fire
policy.
14. Mortgage Clause a clause in an insurance policy that stipulates the rights and obligations of the
insurer and the mortgagee.
15. First-Party Insur- protects the named insured and others with an insurable interest in or mortgage
ance on the property or who entrust their property to the insured-against loss or
damage to the insured property.
16. Third-Party Insur- liability insurance is purchased by the insured (first party) from an insurer (second
ance party) to compensate or indemnify another (third party) for damage or loss for
which the insured is lawfully liable.
17. Direct Loss (or damage to property by direct action of a peril insured against, as distinguished
Damage) from contingent or indirect damage.
18. Plain-Language · policies written in everyday language so that they are easily understood. Technical
Insurance terms with their technical meanings are used only where required by law or when
substitutions would be misleading.
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19. Warranty statement or stipulation or promise in an insurance contract, the breach of which
may nullify the contract.
20. Proximate Cause a cause that, in a natural and continuous sequence unbroken by any new and
independent cause, produces an event and without which the event would not
have happened.
21. Concurrent Cau- a doctrine that holds that if a loss to property is attributable to more than one cause,
sation any one of which is covered by the insurance policy, the loss is payable under the
policy.
22. Actual Cash Value the fair market value of property, taking into account factors that might augment
(ACV) 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.
23. Replacement In- · insurance coverage that indemnifies for loss or damage to insured property at
surance the current market price rather than at a depreciated value. Thus, the rating and
premium are based on the current cost to replace the insured property.
24. Common Law a system of laws originating and developed by England by judges based on court
decisions and similar tribunals. Also known as case law or the law of precedent
25. Civil Code of Que- the civil code in force in the province of Quebec.
bec (Code Civil du
Quebec)
26. Precedent a legal decision that serves as a basis to resolve subsequent disputes in similar
cases.
27. Case Law the body of previously decided cases that courts review for guidance on cases
currently in dispute.
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C12 Insurance on Property Definitions
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1. Property Insur- first party insurance that indemnifies the owner or user of property for its loss, or
ance the loss of its income-producing ability, when the loss or damage is caused by a
covered peril, such as fire or explosion.
2. Insurable Inter- an interest that the insured must have in the subject matter of the insurance
est purchased so that if the event insured against occurs, the insured will suffer an
economic loss.
3. Indemnity a contract, expressed or implied, to repay in the event of a loss. The insured neither
gains nor loses.
4. Contract an agreement or promise between two or more parties that is intended to be
legally enforceable and is constituted by the acceptance by one party of an offer
made by another party, to do or to abstain from doing a specific act. The offer and
acceptance may either be expressed or be inferred through the conduct of the
parties.
5. Contract (Que- an agreement of wills by which one or several persons obligate themselves to one
bec) or several other persons to perform a prestation (that is, a duty, a payment, or a
service).
6. Uberrimae Fiedei of the utmost good faith. The basis of all insurance and reinsurance contracts.
Both parties to the contract are bound to exercise good faith and do so by a full
disclosure of all information material to the proposed contract.
7. Peril the event that caused a loss covered by the policy; for example, fire, windstorm.
8. Deductible 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 insured's obligation to pay a deductible is
not based on whether the insured is at fault.
9. Fire Insurance
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coverage for losses from fire, lightning, and limited to explosion and also the
resultant damage caused by smoke and water. Usually supplemented by extended
coverage insurance.
10. Exclusion risks, perils, or properties defined in the policy as not covered.
11. Flashpoint the lowest temperature at which a liquid gives off sufficient vapours to form an
ignitable mixture with the air.
12. Statutory Condi- special prescribed and standardized conditions that the provincial and territorial
tions insurance acts require to be included in insurance policies.
13. Extended Cover- an endorsement that enlarges the coverage afforded by the primary policy. Cov-
age Insurance erages such as windstorm, hail, smoke, and riot are extended coverages in a fire
policy.
14. Mortgage Clause a clause in an insurance policy that stipulates the rights and obligations of the
insurer and the mortgagee.
15. First-Party Insur- protects the named insured and others with an insurable interest in or mortgage
ance on the property or who entrust their property to the insured-against loss or
damage to the insured property.
16. Third-Party Insur- liability insurance is purchased by the insured (first party) from an insurer (second
ance party) to compensate or indemnify another (third party) for damage or loss for
which the insured is lawfully liable.
17. Direct Loss (or damage to property by direct action of a peril insured against, as distinguished
Damage) from contingent or indirect damage.
18. Plain-Language · policies written in everyday language so that they are easily understood. Technical
Insurance terms with their technical meanings are used only where required by law or when
substitutions would be misleading.
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19. Warranty statement or stipulation or promise in an insurance contract, the breach of which
may nullify the contract.
20. Proximate Cause a cause that, in a natural and continuous sequence unbroken by any new and
independent cause, produces an event and without which the event would not
have happened.
21. Concurrent Cau- a doctrine that holds that if a loss to property is attributable to more than one cause,
sation any one of which is covered by the insurance policy, the loss is payable under the
policy.
22. Actual Cash Value the fair market value of property, taking into account factors that might augment
(ACV) 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.
23. Replacement In- · insurance coverage that indemnifies for loss or damage to insured property at
surance the current market price rather than at a depreciated value. Thus, the rating and
premium are based on the current cost to replace the insured property.
24. Common Law a system of laws originating and developed by England by judges based on court
decisions and similar tribunals. Also known as case law or the law of precedent
25. Civil Code of Que- the civil code in force in the province of Quebec.
bec (Code Civil du
Quebec)
26. Precedent a legal decision that serves as a basis to resolve subsequent disputes in similar
cases.
27. Case Law the body of previously decided cases that courts review for guidance on cases
currently in dispute.
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