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An accident is an event or incident that happens unintentionally, when you least expect it — and it often has a negative impact like loss or injury to the people involved or their belongings.

Accident Benefits

If you’re injured in a collision, the accident benefits portion of your car insurance coverage is designed to cover things like rehabilitation treatment, income replacement, and other services you need to help you recover. Accident benefits coverage is mandatory for drivers in every province and territory except Newfoundland and Labrador.

Actual Cash Value

If your policy is set up to cover the actual cash value of a damaged or lost item, it means you’ll be paid the dollar amount that the item is worth today. This is based on the original purchase price (less depreciation) and the item’s physical condition on the day it was damaged or lost. So, if we need to pay out the actual cash value of your 20-year-old golf clubs, we’ll determine what someone might pay for a similar set of 20-year-old golf clubs in the same condition today.

Check out our blog to learn the difference between actual cash value and replacement cost.


After you submit a claim, an insurance adjuster or claims adjuster is responsible for assessing the damage and determining its true value. Soon after an insured event like a fire or burglary, an adjuster will use a variety of tools to figure out the extent of your loss. This helps us determine how we can support you through the claims process.

Want a sneak peek into the world of an insurance adjuster? Let Keith take you through a typical workday helping Economical customers.


An insurance agent is a licensed person who sells insurance policies on behalf of a single company — unlike brokers, who sell policies for multiple companies.

Visit our blog to learn more about the difference between agents and brokers.

All Perils

All perils coverage on a car insurance policy combines and broadens the protection provided by collision, comprehensive, and specified perils coverage. As the name implies, an all perils policy is the broadest kind of car insurance you can buy.

All Risk

An all risk or comprehensive home insurance policy protects you against loss from all perils or events except those that are specifically excluded. Your all risk policy should contain a list of special circumstances that aren’t covered, which might include things like earthquakes, terrorism, and pollution. Chat with your broker or read through your policy to learn about the specifics. 

Amount of Insurance

The amount of insurance for a particular item on your policy is the maximum amount that we will pay out if that item is lost or damaged. These maximums are outlined in your policy documents.

Basis of Settlement

The basis of settlement is the way that we agree to determine the dollar amount we’ll pay out when you make a claim. The most common ways to settle a claim would be to pay out the actual cash value or the replacement cost of the insured item.

Visit our blog to learn the difference between actual cash value and replacement cost.

Bind or bound

After your broker binds your coverage, they send an application to the insurance company to be reviewed before the policy is issued. A binder is a temporary agreement (either written or verbal) that keeps you covered while you’re waiting to receive your full policy in the mail. When it comes to car insurance, you’ll also receive a temporary pink slip or proof of insurance.


Insurance brokers are independent, licensed business people who can help you find the best coverage for your situation at the best price. Brokers partner with multiple insurance companies — not just one — so they are happy to shop around to find you the best deal. Plus, they know the insurance business inside and out, so they are your go-to source for advice and information.

Want to learn more about what a broker can do for you? Discover the broker difference today.


When you submit a claim, you’re asking your insurer to compensate you for loss or damage to items that are covered by your insurance policy. Your broker is your first point of contact if you need to make a claim, followed by our 24-hour service line.

Check out our blog to learn what information you could be expected to provide when you make a car insurance claim or a home insurance claim

Collision Insurance

Collision coverage gives you protection for any physical damage to your vehicle that results from an accidental run-in with another vehicle, or even an inanimate object like a tree.


Home insurance

Otherwise known as an all risk policy, a comprehensive home insurance policy is just what it sounds like: a thorough insurance policy that protects you against losses due to a broad range of events. Events that are not covered will be clearly listed in your policy documents, but you can always reach out to your broker to learn more. Check out our blog to find out how comprehensive home insurance coverage is kind of like ordering a pizza with “the works!”

Car insurance

The comprehensive section of your car insurance policy covers damage to your vehicle that is not caused by a collision. This coverage includes damage caused by things like fire, vandalism, theft, and falling objects.


A condition of your insurance policy is a rule you have to follow in order to qualify for coverage should you decide to make a claim. If you break one of these rules or conditions, you may no longer be covered by your existing policy.

For example, if one of the conditions of your home insurance policy is that your house can’t be vacant for longer than 30 consecutive days, then you’ll probably have trouble claiming on fire damage six months after you packed up and moved. Talk to your broker to learn about the specific conditions of your policy or learn about the top three reasons insurance companies cancel policies.

Contents Insurance

Contents insurance protects your personal belongings, and it’s generally included in your home or tenant insurance policy. Your policy likely has a set limit for contents coverage. 


Your deductible is the dollar amount that you agree to pay out of your own pocket in the event of an insurance claim.

Picture this: You’re in an accident and the total approved cost to repair the damage to your car is $5,000. If your deductible is $1,000, you have to pay that amount, and we will pay the remaining $4,000. If you choose to have a higher deductible, your premium payments may be lower — but you’re expected to pay that deductible amount when you make a claim.

Get the lowdown on deductibles on our blog.


When we consider an item’s depreciation, we are looking at how the value of an item has decreased over time — usually due to everyday wear and tear. For example, your brand new car will depreciate (or decrease) in value over time, depending on how many kilometres you’ve driven and how well it has been maintained.

To calculate the amount that an item has depreciated, we’ll look at its condition immediately before the loss or damage, what it is ordinarily used for, its realistic resale value, and its normal life expectancy.

Depreciation is often considered when we’re determining the value of a claim payment.

Depreciation Waiver

If you purchase a depreciation waiver when insuring a brand new vehicle, you will be covered for the full purchase price or the manufacturer’s suggested retail price (whichever amount is lower) if your vehicle is stolen or damaged beyond repair. Without a depreciation waiver, you will only receive the depreciated value of your vehicle, which might not be enough to buy a brand new one. Before insuring your new car, ask your broker if you qualify for a depreciation waiver

Detached Structures

When your insurance policy refers to detached structures, it is referring to structures that aren’t physically attached to your house. Detached structures could include your tool shed, your detached garage, or your backyard gazebo. Talk to your broker to make sure you have the right coverage for your detached structures and the stuff inside.

Direct Compensation Property Damage

In provinces where you can purchase direct compensation property damage (DCPD) coverage, the DCPD section of your policy provides coverage for damage to your own vehicle to the extent that you are not at fault for an accident.

Picture this: You stop at a red light, but the driver behind you isn’t paying attention and rear-ends your car. The police report says the other driver is at fault, so your own insurer will pay for repairs to your vehicle out of your DCPD coverage. If the situation was turned around and you were at fault for the collision, damage to your vehicle would only be covered if you have purchased collision coverage. If you’re considered 50% at fault for a collision, 50% of your claim would be covered by DCPD, and 50% would be covered by collision insurance (if you have it).

Visit our blog to learn more about direct compensation property damage and how it affects you.


An endorsement is a change to the existing coverage outlined in your insurance policy. It can add or remove coverage, and it overrules any wording in the policy itself. One type of endorsement is a rider, which adds additional coverage to your policy.


An exclusion is a peril, event, or type of damage that isn’t covered by your insurance policy. Many policies contain a list of exclusions that outlines exactly what types of claims can’t be made. Some common exclusions are war and military action, damage caused by pests like skunks and raccoons, and theft by a person who lives in your household. Talk to your broker or read through your policy documents to learn about your policy’s exclusions.


In insurance terms, flooding refers to unwanted water that can damage your home, property, or belongings. Flooding includes natural disasters like tidal waves and tsunamis, as well as water that overflows or makes its way out of a nearby ocean, lake, or pond. Although you may refer to the gushing pipe in your basement as a “flood,” in insurance terms, this would be known simply as water damage. Talk to your broker to find out how and when you’ll be covered in the event of a flood.


Insurance fraud is an attempt to make a false or exaggerated claim in hopes of receiving an undeserved payout from your insurance company. Common examples of insurance fraud include staged car accidents, staged home fires, or even faked deaths.

Insurance fraud isn’t always so obvious, and even seemingly small exaggerations or white lies are taken seriously. Picture this: A sewer backup in your basement puts your freezer out of commission, and all you lose is a box of popsicles and a few frozen pizzas — but you figure it can’t hurt to make a claim for $300 worth of filet mignon. You’ve just committed insurance fraud, a crime that could stick you with a criminal record or even jail time.

If you suspect someone of committing insurance fraud, it is your duty to report it. We all pay for false claims.

High-risk Insurance

High-risk insurance (also known as non-standard coverage) is car or home insurance for people who aren’t eligible for standard insurance coverage. This can include situations where there have been multiple driving convictions, when multiple insurance claims have been made, or when policies have previously been cancelled for non-payment. Visit our blog to learn more about the most common reasons you could find yourself shopping for high-risk insurance.


If we indemnify you following a claim, it means we have compensated you for an insured loss — either by replacement, repair, or payment.


An insurer is an insurance company.

Loss of Use

If your vehicle is stolen or damaged by a peril that is covered by your car insurance policy, loss of use coverage provides you with a replacement vehicle (or reimburses you for other transportation methods) while your vehicle is being repaired or replaced. Talk to your broker to find out what kind of loss of use coverage is included with your own policy.

Market Value

How much would your house — and the property it’s on — sell for in today’s market? This amount is the current market value of your home.

One way to calculate the market value of your home is to research the asking price for similar properties for sale in your neighbourhood — but don’t forget to consider things like upgrades and lot measurements. You can also ask a real estate agent to do a comparative market analysis, which will compare your property with others in the area that have sold recently (looking at things like square footage, renovations, and the number of bedrooms). 

Named Peril Policy

A named peril policy (also known as a basic policy) only provides coverage for the specific perils that are listed in the policy documents — unlike an all risk policy, which covers all perils except those listed as exclusions

Overland Water

Overland water is just what it sounds like: water that travels over land and causes damage to your home, property, or belongings. This can refer to flooding caused by heavy rainfall or melting snow, as well as overflow from nearby bodies of water. Ask your broker what kind of overland water coverage is included in your policy. 


A peril is a chance event that could cause loss or damage to your home, your vehicle, or any other belonging you’ve insured. A named or specified peril is a specific peril that is covered — and listed explicitly — in your policy. For example, your insurance policy may cover losses caused by specific named perils such as fire and theft, but it may not cover other unnamed perils like your dog having an accident on your brand new sofa.

Side note: Perils are sometimes referred to as events in newer policy documents. Every policy is different, so reach out to your broker to learn about the different types of perils and what’s covered by your own insurance policy.


A premium is the amount of money you pay for the promise that we’ll have your back when you’re in a jam — a jam that’s covered by your policy, that is. A premium is not a dollar amount you pay for your physical policy documents. 

Proof of Insurance

When talking about car insurance, proof of insurance usually refers to the pink slip you keep in your vehicle to prove that you have an active insurance policy. It contains information such as the name of your insurance company, your policy number, the make, model, and year of your vehicle, and your policy expiration date. You could face a fine if you can’t provide proof of insurance at the scene of a collision, so keep it in your vehicle at all times.

Proof of Loss

If you make a home insurance claim, you may be asked to provide a proof of loss declaration that outlines details of your claim as requested by your insurance company.

Property and Casualty Insurance

Property and casualty insurance is the category of insurance coverages designed to help protect your stuff (like your home, car, and belongings). It also includes third-party liability coverage in case you’re found legally responsible for an injury or damage to someone else’s belongings.  

Replacement Cost

An item’s replacement cost is the dollar amount you would need to purchase a new item similar to the item that is now lost or damaged. If we are planning to pay you the replacement cost of your totaled two-year-old tow truck, we would find out how much it would cost to buy a new tow truck of comparable quality.

Want to learn the difference between replacement cost and actual cash value? Visit our blog to learn how both calculations work in real life.


A rider (also known as a floater) is an optional or additional coverage on your insurance policy. For example, your current homeowner’s policy may not cover that original Warhol you just won at an auction, so you may need to add a rider to ensure you have coverage for the value of the artwork. Another type of rider you might add to your policy is additional coverage for jewelry or other precious items that go above the standard limits in your policy. Contact your broker if you’re unsure about your current coverage.


Salvage is any property of value that remains after you’ve made a claim. For example, if you’re involved in a collision and your vehicle is totaled, it may still have some value if it can be sold and stripped for parts. After your claim has been paid, your insurer has the right to take any salvaged items and sell them to try to recover part of the amount they paid out for your claim.

Scheduled Articles

Most insurance policies will show a maximum limit paid for certain types of belongings. These may include items like jewelry and gemstones, collectibles like rare baseball cards and signed books, and personal items kept in your safety deposit box.  Talk to your broker about adding endorsements for anything that falls outside of your basic coverage. When you add additional coverage for specialty items, they are scheduled in your policy.

Visit our blog to learn how your home insurance policy can protect your diamond rings and other fancy things.

Specified Perils

Specified perils coverage on your car insurance policy only covers damage or loss caused by perils that are specifically outlined in the policy wordings. Specified perils include fire, lightning, theft, and earthquake, but it doesn’t cover vandalism or falling objects.

Subrogation Clause

Many insurance policies contain a subrogation clause, which gives your insurance company the right to take legal action and recover the amount of your claim payment from whoever is legally responsible for the loss.

Picture this: You buy a brand new toaster and it sets your kitchen on fire the first time you use it. If you make an insurance claim, your own insurance company will pay for the damage to your home and then subrogate against the manufacturer of the toaster (or their insurance company) to try to recover the amount they paid out.

The Insured

In an insurance policy, the insured is the person (or business) that can benefit from claims payments under the terms of that policy. 

Third-Party Liability Coverage

Third-party liability coverage (or liability insurance) is part of many insurance policies. It protects you from having to write a hefty cheque in the event that you’re held legally responsible for an injury or damage to someone else’s personal belongings.

Picture this: It’s New Year’s Eve, and your best friend shows up to your annual bash in a shiny new pair of designer heels. At the end of the night, you discover that your slobbery puppy has a taste for heels, too — and he’s destroyed one of her $1,000 shoes. Thanks to liability coverage, you can replace your friend’s shoes — and save your friendship — without breaking the bank.

Did you know that liability insurance has you covered wherever you go? Check out our blog to learn more.

Under Construction

Your home is considered under construction while you’re completing renovations that will change its overall structure. You could be building an extension or knocking down a wall to make your top floor open-concept, for example. Generally speaking, the building project is so big that you can’t stay in your house while it’s going on. Whenever you’re planning for home renovations, talk to your insurance broker to make sure you have the coverage you need.


If your home or property is vacant, it usually means you’ve moved away and don’t plan to return. For example, if your family packs its things and moves into a new house but keeps both houses, your existing home will likely be considered vacant after it has been empty for 30 days. Some insurance policies won’t cover losses or damage to vacant houses, and some companies require owners of vacant homes to purchase high-risk insurance, so it’s best to talk to your broker if you plan to leave your home for an extended period of time.

Every policy — and every insurance company — is unique, and we can only speak for ourselves.

This glossary is intended to provide general information only and is not a statement of coverage. The specific terms of your policy will always apply.

Have a question about the terms in your own policy? Reach out to your broker for the nitty-gritty details.

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