CIC Personal Lines key terms

A settlement method that pays the cost to replace damaged property minus depreciation, reflecting what the item was worth just before the loss rather than what a new one costs.

A valuation basis that pays what it costs today to buy or rebuild equivalent new property, without deducting for age or wear, usually subject to policy limits and conditions.

The reduction in an item's value caused by age, use, wear and tear, or obsolescence; insurers subtract it when settling claims on an actual cash value basis.

An optional endorsement that pays to rebuild beyond the dwelling limit by a stated percentage, such as 125%, when construction costs exceed the amount shown on the policy.

Coverage that pays the full cost of rebuilding the home even if it exceeds the policy limit, provided the insured accurately reported the dwelling's details and insured to the required amount.

A property condition requiring the insured to carry insurance equal to a stated percentage of the property's value; a lower limit reduces the claim payment proportionally.

The amount of each covered loss the insured must absorb before the insurer pays; it may be a flat dollar figure or a percentage of the dwelling limit.

The maximum amount an insurer will pay for a covered loss under a given coverage, as shown on the declarations page; amounts above the limit are the insured's responsibility.

A written amendment added to a policy that changes, adds, or removes coverage, such as adding a water backup endorsement or scheduling jewellery; it takes precedence over the printed form.

A provision that removes specific perils, property, or situations from coverage, such as wear and tear, intentional acts, or damage from certain water sources.

A coverage approach that insures only the perils specifically listed in the policy, such as fire, lightning, windstorm, and theft; anything not listed is not covered.

A coverage approach that insures against all risks of direct physical loss except those expressly excluded, placing the burden on the insurer to prove an exclusion applies.

A financial stake in the person or property insured such that the insured would suffer a genuine economic loss if it were damaged or destroyed; required for a valid contract.

The principle that insurance should restore the insured to roughly the same financial position held before a loss, neither creating profit nor leaving a shortfall.

The mutual duty on both applicant and insurer to deal honestly and disclose material facts; breach by the applicant can allow the insurer to void the policy.

Information that would influence an insurer's decision to accept a risk or set its terms, such as a prior fire loss or a business operated from the home.

A false or misleading statement made by an applicant or insured during underwriting or a claim; if material, it may allow the insurer to deny coverage or void the contract.

A floater or endorsement listing specific valuables, such as jewellery or art, with individual limits and broader coverage, often including accidental loss or mysterious disappearance.

Caps within the contents coverage that restrict payment for categories such as cash, jewellery, bicycles, or business property, unless the item is separately scheduled.

Coverage that pays sums the insured becomes legally obligated to pay because of bodily injury or property damage caused to others by their personal activities.

No-fault coverage that pays reasonable medical expenses for guests or others injured on the insured premises or by the insured's activities, regardless of legal liability.

Coverage that pays the extra cost of temporary housing and living costs, above normal expenses, when a covered loss makes the home uninhabitable.

A property coverage that reimburses the insured for increased living costs or lost rental income when a covered loss prevents the home or a rented unit from being used.

The amount a damaged or unusable portion of the insured property would have rented for, used to measure loss of use when the insured rented out part of the home.

The part of a homeowner's policy that insures the house structure, attached additions, and permanently installed fixtures against covered perils, up to the limit stated.

Coverage for detached structures on the residence premises, such as a garage, shed, or fence, typically at a percentage of the dwelling limit.

Coverage for the insured's household contents and belongings, both at home and, within limits, while temporarily away, such as clothing and furniture.

Alterations or upgrades a tenant makes to rented premises at their own expense; tenant policies can cover the resulting loss of value if damage occurs.

A property coverage that reimburses the insured for increased living costs or lost rental income when a covered loss prevents the home or a rented unit from being used.

A person other than the insured and insurer who suffers injury or damage and may claim against the insured; liability coverage responds to such claims.

Failure to exercise the degree of care a reasonable person would use in similar circumstances, creating an unreasonable risk of harm to others.

Two triggers for coverage: an occurrence policy responds to events that happen during the policy period, while a claims-made policy responds when a claim is first reported.

The dates shown on the declarations page during which the policy is in force; losses outside these dates are not covered unless an extension applies.

The part of the policy that names the insured, lists the property and limits, shows the policy period, and states the premium and deductibles.

A homeowner's-style form written for renters that insures personal property, liability, and loss of use, but not the rented building itself.

A form for owners of condominium units, covering personal property, liability, and building elements the unit owner must insure under the condominium documents.

A separate policy providing excess liability limits above a homeowner's or auto policy, and sometimes filling gaps, after the underlying limits are exhausted.

An optional addition that covers loss caused by water backing up through sewers or drains or overflowing a sump, which standard policies usually exclude.