CIC Personal Lines flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Indemnity principle

The insured is restored to approximately the pre-loss financial position, never better off. Insurers pay the lesser of the loss, the policy limit, or the applicable valuation method (ACV or replacement cost).

Actual cash value

Replacement cost minus depreciation. Used to settle losses where replacement cost coverage is not purchased or where the insured fails to meet the co-insurance requirement.

Replacement cost

The cost to repair or replace damaged property with new property of like kind and quality, without deduction for depreciation, subject to the policy limit and co-insurance conditions.

Utmost good faith

Both insurer and insured must disclose all material facts. Non-disclosure or misrepresentation of a material fact can allow the insurer to void the policy from inception.

Insurable interest

A financial interest in the property that would be harmed by its loss. It must exist at the time of loss for property claims and creates the basis for indemnity.

Subrogation

The insurer's right, after paying a claim, to step into the insured's shoes and recover the loss from the negligent third party responsible, preventing double recovery.

Co-insurance clause

A property clause requiring insurance to at least a stated percentage of value (often 80%). If underinsured, the claim is reduced by the ratio of carried limit to required limit.

Deductible

The amount the insured absorbs on each claim before the insurer pays. A higher deductible lowers premium but increases the insured's out-of-pocket cost per loss.

Coverage A Dwelling

The homeowners coverage for the main structure and attached structures such as garages and decks, insured for the replacement cost stated on the declarations page.

Coverage B Detached Structures

Covers detached private structures such as sheds, detached garages, and fences on the premises, typically limited to 10% of Coverage A unless otherwise stated.

Coverage C Personal Property

Covers the insured's personal property worldwide, typically at 50% of Coverage A, subject to special limits for categories such as jewellery, money, and business property.

Coverage D Additional Living Expenses

Pays increased living costs when the dwelling is uninhabitable due to an insured peril, including temporary accommodation, meals, and loss of fair rental value, up to the stated limit.

Special limits of liability

Caps on specific categories of personal property, such as money, jewellery, furs, silverware, and bicycles. Items above the limit need a scheduled floater or endorsement.

Named perils vs all risks

Named perils forms cover only the perils listed; all risks (comprehensive) forms cover all risks of direct physical loss except those expressly excluded.

Sewer backup endorsement

An endorsement that adds coverage for loss or damage caused by the backing up or escape of water from sewers, drains, or sumps, which is otherwise excluded.

Dwelling policy

A named-perils form insuring the dwelling and personal property of an owner-occupant or tenant, typically without personal liability unless added by endorsement.

Guaranteed replacement cost

An endorsement that pays the full cost to rebuild the dwelling even if it exceeds the policy limit, provided the insured maintains insurance to at least 100% of replacement cost.

Property removed from premises

Personal property temporarily away from the described premises for repair, storage, or seasonal use is covered for a limited period, commonly 30 days.

Third-party liability auto

Covers the insured's legal liability for bodily injury and property damage to others arising from the ownership, use, or operation of the automobile, up to the stated limit.

Accident benefits (SABS)

No-fault benefits paid to the insured and occupants regardless of fault, including medical, rehabilitation, income replacement, attendant care, death, and funeral benefits, subject to provincial limits.

DCPD

Direct Compensation for Property Damage: a no-fault system where the insured's own insurer pays for damage to the insured vehicle when the other driver is at fault, with no deductible when not at fault.

Uninsured automobile coverage

Responds when the insured is injured or the vehicle damaged by an identified or unidentified uninsured or hit-and-run driver, up to the policy limits.

Collision coverage

Pays for damage to the insured vehicle caused by collision or upset (rollover), subject to the deductible selected on the declarations page.

Comprehensive auto coverage

Pays for damage to the insured vehicle from perils other than collision, such as fire, theft, vandalism, and weather, subject to the deductible.

OPCF 44R Family Protection

An endorsement that provides excess liability coverage when the insured is injured by an underinsured or uninsured motorist, above the third-party liability limits of the at-fault driver.

OPCF 43 Waiver of Depreciation

An endorsement that pays replacement cost for a new vehicle in a total loss or theft during a specified period, rather than actual cash value.

Total loss settlement

When repair cost approaches or exceeds actual cash value, the vehicle is a total loss and is settled at ACV unless a waiver of depreciation endorsement applies.

Personal liability coverage

Covers the insured's legal liability for bodily injury or property damage to third parties from personal activities, with defence costs paid in addition to the limit.

Voluntary medical payments

Pays small medical claims regardless of legal liability, avoiding litigation and preserving goodwill. Limits are low, commonly around $5,000.

Personal umbrella liability

Excess liability above the underlying homeowners and auto limits, and may fill gaps for exposures not covered by the underlying policies, subject to a self-insured retention.

Personal articles floater

Schedules valuable items such as jewellery, fine art, and musical instruments on a worldwide, all-risk basis without a deductible, requiring an appraisal or bill of sale.

Condominium unit owner coverage

Covers contents, betterments and improvements, loss assessment, and personal liability. The corporation's policy covers common elements and the building, not the unit owner's contents.