Most of the definitions below are provided courtesy of the Insurance Institute of Canada. Definitions provided by Insurance Bureau of Canada are indicated with an asterisk ("*").
The language of insurance can be quite complex and confusing. Below are some commonly used insurance terms and their meanings. Insurance professionals with whom you may come into contact should be prepared to explain these terms. If you don't understand, ask!
This information is for educational purposes only and should not be relied upon to form professional opinions on coverage issues.
- The amount, established or reviewed by government, used to calculate premiums to be paid on an auto insurance policy.
- Red Book*
- Canadian publication which lists the values of automobiles, including their wholesale and average retail price, used as a guide by automobile dealers, claims adjusters etc., to establish market value of used automobiles. American version of this publication is called a "Blue Book".
- Registered Insurance Brokers of Ontario (RIBO)
- Legislation in Ontario requires the licensing and self regulation of all brokers in the province selling insurance to the public. (Not to be confused with agents that represent a specific company.)
- Regular Insurance Market*
- When the insurance business environment is operating effectively, low-risk consumers find that auto insurance is available to them from any insurance company and at a reasonable price.
- The federal, provincial or territorial government agency responsible for the control and regulation of the insurance industry under its jurisdiciton.
- The reactivation of suspended or cancelled insurance.
- Insurance purchased by an insurance company from another insurance company (reinsurer) to provide it protection against large losses on cases it has already insured. Essentially, insurance for insurance companies.
- Relative claim index – CLEAR *
- The relative index based on the cost per vehicle for a specified coverage’s insurance claims.
- The standard fire insurance policy clause which insures against reasonable costs incurred and damage done in removing the insured property from the path of the fire or other insured peril in order to mitigate the loss.
Removal may mean taking the property to some place other than that at which it was insured.
- A certificate which attests to the fact that an insurance policy has been extended for another term.
- Renewal Certificate
- It is the practice by many insurers to issue a short form certificate instead of writing a whole new policy to replace an expiring one. This form is the renewal certificate and contains references to the original policy rather than repeating its complete terms.
See also Renewal.
- Rent Insurance
- A form of loss of use insurance protecting against loss of rental income. It is particularly valuable where a landlord may depend upon a rental income from his various premises to pay the mortages. In event of fire, the rents may cease, but his obligation to pay the mortgage may continue.
- Rental Value Insurance
- Insurance which reimburses the owner/occupant of a building for the cost of renting other premises if his building is rendered unusable by some peril insured against.
- Replacement Cost*
- The cost of replacing property without deduction for depreciation. (See also Actual cash value and Depreciation)
- Residual Market*
- A system through which insurance is made available to customers that represent unusually high risks. This insurance is provided through Facility Association
- Return Premium
- A refund to the policyholder of part of the premium he has paid because of cancellation, rate reduction, reduction in amount of insurance, or some similar reason.
- Rider (or Endorsement)
- An amendment to an insurance policy. It is used to add or remove coverage.
- A chance of loss or injury for which an insurance claim may be submitted. For a risk to be insurable, related events that could result in a claim must be unexpected (see Accident and Occurrence). For example, the possibility that a visitor to a policyholder’s home will injure himself or herself by falling on the steps is an insurable risk, because such a fall would be unexpected. Expected losses, such as the gradual wearing-out of clothes or the rotting of fruit, are not insurable risks.
- Risk Manager (Risk Management)
- Organizations, especially larger entities, have recognized the need to better understand their exposures and means of covering their exposures. A risk manager will determine all of a company's exposures, determine if insurance or self insurance is appropriate, and coordinate loss control.
- The taking of another's property by force or threat of force.
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