• Absolute Liability – Refers to the insurance company’s unconditional responsibility to a third party even if a statutory breach on the part of the insured occurred.
  • Actual cash value – Actual cash value is a form of property insurance in Alberta, and factors in the amount of depreciation in value of damaged property before replacement.
  • Adjuster – A representative of an insurance company who evaluates and settles claims.
  • Agent – Someone who represents one insurance company and offers only their products.
  • Broker – Someone who is licensed to offer the insurance products of more than one insurance company.
  • Cancellation – The dissolution of an insurance policy before its official expiration date.
  • Cancellation (flat) – Insurance companies can cancel a policy at any time. A flat cancellation usually results in a full refund to the consumer, and may occur if an insurance company reaches the conclusion that it provided an incorrect quote. A flat cancellation may also occur if a policy is voided. This can happen if an insurance company determines that it was not provided enough information to properly assess risk.
  • Cancellation (pro-rata) – A pro-rata cancellation is when an insurance company cancels a policy and re-calculates the premium in accordance to the amount of time coverage was in effect. A portion of the premium is then returned to the policy-holder.
  • Cancellation (short-rate) – A short-rate cancellation is when a customer requests to have their policy made void. If it is so stipulated in the policy, the insurance company may then charge a larger premium larger than what was applicable for the period insured. Generally, this increased charge is because of fixed expenses sustained by the insurance company, which often use fixed rate tables to calculate the premiums they have earned.
  • Co-insurance clause – A clause in your insurance policy that will limit the amount recovered from an insured claim should the total values insured not meet the minimum criteria.
  • Claim – If a policy-holder suffers an insured loss they may make a claim for payment according to the terms of their policy.
  • Deductible – Before an insurance claim will be processed and the holder reimbursed they must pay their deductible amount, which can vary according to the policy. A common deductible amount is $500. For example, if you are in a car accident and your vehicle incurs $2,000 in damage, you are responsible for $500 of the repair cost. The insurance company will then cover the remaining $1,500.
  • Endorsement – Also often called a rider, endorsements are additions or amendments to a policy. Common endorsements are for high-value items such as jewellery, artwork and sports equipment.
  • Lapse in coverage – The longer you hold a particular policy the higher it is rated by the insurance company. A lapse in coverage – however brief – may negatively factor in to the rate charged by an insurer. If considering cancelling a policy for a short term, check with your insurance broker to ensure that the lapse in coverage will not adversely affect you and your future insurability.
  • Premium – After calculating your risk an insurance company will assign you a premium amount. Premiums may be paid monthly or yearly.
  • Replacement cost – With replacement cost coverage, if your belongings are destroyed or stolen your insurer will replace or rebuild your property without factoring in depreciation. 
  • Self-insured retention (SIR) – The amount of any claim that you are responsible for regardless of whether the claim is paid out. This can include adjuster costs.
  • Third party liability insurance – Liability is your legal responsibility to compensate for bodily injury or property damage that you have caused to others. Third party liability insurance protects you against severe financial consequences.
  • Underwriter – Underwriters are those who determine and assess levels of risk and whether or not they are acceptable so that an insurance company may provide coverage.