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.
- Umbrella Policy
- A special form of liability policy designed to protect the insured for certain unknown contingencies over and above the normal coverages and to provide excess insurance.
- Underinsured Motorist Coverage*
- A form of insurance that pays for the bodily injury or property damage caused by the owner or operator of an inadequately insured automobile.
- An underwriter is an employee of an insurance company who looks at an insurance application and decides whether or not the insurance company can or should provide the applicant with insurance, based on the risk that person presents.
- Underwriting Profit or Loss*
- The amount of money that an insurance company gains or loses as a result of its insurance operations. It excludes investment transactions and income taxes.
- Underwriting Rules*
- The rules used by insurance companies to assess the risk they are taking on by insuring a particular customer. These rules are set individually by insurance companies.
- Uninsurable Perils*
- These are events or situations for which insurance coverage cannot be purchased. The damage as a result of these incidents is usually predictable or preventable. For example, if you build your house on a flood plain, your house will, at some point, be flooded. Flooding, in this case, is an uninsurable peril.
- Uninsured Motorist Coverage*
- A form of insurance that pays for the bodily injury or property damage caused by the owner or operator of an uninsured automobile. In some parts of the country, this is referred to as “Section D.”
- Unnamed Insured
- A party who is not named in an insurance policy but who nevertheless is covered by the policy.
- Where the premises contain contents but no human beings, such persons being temporarily away from the premises, on vacation for example, the premises are said to be unoccupied. This is distinguishable from Vacant in that in vacancy, the contents have been moved out leaving nothing but the building.
- A property located in an area not regularly serviced by a fire department.
- Utmost Good Faith
- A phrase in a legal document calling for the highest standards of integrity on the part of the insured and the insurer.
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