Glossary of Insurance Terms
Printed with permission from the Insurance Institute of Canada.
Please choose a letter to continue:
Rate
Receiver
Refund
Registered Insurer
Regulator
Reinstatement
Release
Removal
Renewal
Renewal Premium
Repairs
Replacement
Replacement Cost Clause
Replacement Value
Representation
Rider
Risk
Robbery
Rate
The price for $100 or $1,000 of insurance, usually for
one year, expressed in dollars and cents. Alternatively,
the rate is the premium for a specified amount of
insurance, for a specified time.
For some types of insurance in some jurisdictions legislation requires rates to be applied consistently to similar risks, and certain jurisdictions require regulatory approval of rates, e.g. auto.
In addition to policyholder premium rates, the industry commonly uses the term "rate" in reference to reinsurance premium rates, and to commission costs for both insurance and reinsurance.
Receiver
Person appointed to hold in trust and to administer
property of insolvent companies.
Refund
A return to the policyholder of part of the paid premium,
because of cancellation, suspension, reduction in
insurance coverage, or because of rate reduction.
Registered Insurer
The registration of a reinsurer is significant in
determining whether an insurer can obtain full credit
with regulators for the transfer of insurance liabilities
to a reinsurer. Any reinsurer not under the regulatory
control of a Canadian insurance regulator (is not
licensed) is deemed unregistered and the primary insurer
must cover any liabilities transferred to this
unregistered reinsurer.
Note: Registration (corporate), should not be confused with Licensing (operations).
Regulator
The federal, provincial or territorial government agency
responsible for the control and regulation of the
insurance industry under its jurisdiction.
Reinstatement
The reactivation of suspended or cancelled insurance.
Restoration of full amount of insurance or reinsurance
after a claim has been paid, with or without the payment
of additional premium.
Release
A discharge from obligation or responsibility. To let go
of, or give up a legal claim. The most common types in
insurance are: First Party Release - between the insured
and the insurance company. Third Party Release - between
the insured and a third party. Indemnifying Release -
between the insured and a guardian for a minor or other
person not legally competent.
Removal
The standard fire insurance policy insures against damage
done in removing the insured property from the path of
the fire or other insured peril (if loss is mitigated).
Removal also may mean the taking of property to some place other than that at which it was insured.
Renewal
A certificate which attests to the fact that an insurance
policy has been extended for another term.
Renewal Premium
The premium for the new term of the policy.
Repairs
Generally an insurance policy will set out the conditions
for an insured to effect repairs to insured property.
Ordinary repairs are usually permitted without notice to
the insurer.
Replacement
Most policies of insurance of property give the company
the right to substitute other property of like kind and
quality for insured property which has been damaged or
destroyed. This is making a replacement.
Replacement
Cost Clause
Applies generally to some fire insurance policies where a
special cover may be purchased so that in the event of
fire, repairs or replacement will be made with material
of like kind without cost to the insured for depreciation
or betterment.
Replacement Value
The cash value representing what it would cost to replace
the particular article which is the subject of the
insurance.
Representation
The acceptance or rejection of an insurance risk and the
amount of premium that would be required, is determined
by information submitted by the person applying for such
insurance.
Statements which would normally lead the company to decline the acceptance of a risk, or to charge a much higher rate, are material to the risk and are commonly considered "warranties."
All other statements such as the insured's address, etc. are referred to as mere "representations" to distinguish them from the more important statements considered to be "warranties."
The penalty for false information on material facts or "warranties" may be voiding of the policy.
Rider
Another name for an endorsement.
Risk
The chance of loss. Specifically the possible loss or
destruction of property or the possible incurring of a
liability. Sometimes refers to the subject of an
insurance contract.
Robbery
The taking of another's property by force or threat of
force.
