Glossary
Key Insurance Terms
You can find more terms in the The Insurance Bureau of Canada’s glossary.
Actual Cash Value (ACV)
Replacement cost of damaged or lost property less depreciation. Example: Fire destroys 18-year-old sofa. If the contents coverage is ACV, the insurer will pay the value of an 18-year-old sofa (i.e., not very much). Auto insurance is generally ACV. For new vehicles there is an endorsement (OCPF43/43a) that gives replacement cost for a period of generally 2 years.
Agent
An insurance professional who is an employee of one insurance company, selling and servicing that company’s products.
Broker
An insurance professional who is an independent salesperson selling and servicing products from several different companies with which they have agreements. Insurance companies pay brokers commissions for the coverages they sell.
Certificate of Insurance:
A statement from an insurance company that explains what is covered by a policy, for what period, and to what limit.
Claim
A request for payment of a loss in accordance with an insurance policy.
Claims-made policy
A policy that provides coverage for claims made when the policy is active, even if the incident leading to the claim took place before the policy was in place.
Contact IBC for permission to reproduce list.
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