Plain language
Canadian insurance glossary
Insurance jargon, explained the way you’d explain it to a friend.
- Accident benefits Auto
- Auto insurance coverage that pays medical, rehabilitation, attendant care and (where purchased) income-replacement benefits after a collision, regardless of fault. In Ontario, only medical, rehabilitation and attendant care are mandatory since July 1, 2026.
- Accelerated underwriting Life
- A faster life insurance approval process where healthy applicants can skip the medical exam; the insurer relies on health questions and database checks (e.g. prescription and MIB records).
- Actual cash value (ACV) Property
- A claim settlement equal to replacement cost minus depreciation. Policies with replacement cost coverage pay what it costs to replace the item new.
- Additional living expenses (ALE) Property
- Home, condo or tenant coverage for extra costs — hotel, meals, moving — while your home is unlivable after an insured loss.
- Beneficiary Life
- The person or organization you name to receive a life insurance payout. Naming a beneficiary directly generally keeps proceeds out of your estate and probate.
- Business interruption Business
- Commercial coverage that replaces lost income and pays continuing expenses while a business recovers from an insured loss such as a fire.
- Certificate of insurance (COI) Business
- A document proving a business carries specific coverage and limits — often required by clients, landlords and general contractors.
- Collision coverage Auto
- Optional auto coverage that pays to repair your vehicle after a collision with another vehicle or object, subject to your deductible.
- Commercial general liability (CGL) Business
- Business insurance covering third-party bodily injury and property damage arising from your operations, premises or products.
- Comprehensive coverage Auto
- Optional auto coverage for non-collision damage: theft, fire, vandalism, hail, falling objects and similar perils.
- Contestability period Life
- Usually the first two years of a life policy, during which the insurer can review and potentially rescind coverage for material misrepresentation on the application.
- Conversion privilege Life
- The right to convert a term life policy into permanent coverage without new medical evidence, usually before a stated age such as 65 or 70.
- Creditor insurance Life
- Insurance sold by a lender (e.g. mortgage life insurance from a bank) that pays the lender, usually with a benefit that declines with the loan balance.
- Critical illness insurance Health
- Insurance that pays a lump sum after diagnosis of a covered condition such as cancer, heart attack or stroke, once a survival period (often 30 days) has passed.
- Deductible General
- The portion of a claim you pay before the insurer pays. Higher deductibles usually mean lower premiums.
- Deductible assessment (loss assessment) Property
- Condo coverage for your share of a deductible or uninsured loss that the condominium corporation charges back to unit owners.
- Direct Compensation – Property Damage (DCPD) Auto
- Ontario auto coverage that pays for damage to your vehicle from your own insurer when another driver is at fault. It became optional in Ontario in 2024.
- Elimination period Health
- The waiting period between the start of a disability and the first disability insurance benefit — commonly 30, 60, 90 or 120 days.
- Endorsement (rider) General
- An add-on that changes a policy’s coverage — for example sewer backup on home insurance or a child term rider on life insurance.
- Errors & omissions (E&O) Business
- Professional liability insurance covering claims that your advice or professional service caused a client a financial loss.
- Guaranteed issue Life
- Life or health coverage with no medical questions. It usually has lower maximums, higher premiums and (for life) a waiting period for non-accidental death.
- Guaranteed replacement cost Property
- Home coverage that pays the full cost to rebuild even if it exceeds the dwelling limit, subject to conditions such as accurate valuation.
- Improvements and betterments Property
- Upgrades to a condo unit beyond the standard unit definition (e.g. hardwood floors, renovated kitchen) that the unit owner must insure.
- Liability coverage General
- Insurance that pays others for injury or property damage you are legally responsible for, plus legal defence costs.
- LLQP Life
- Life Licence Qualification Program — the exam-based qualification Canadian life and accident & sickness insurance agents must complete before being licensed.
- Overland water (overland flood) Property
- Optional home coverage for water that enters from the surface — river overflow, heavy rain or storm surge. Standard policies usually exclude it.
- Own-occupation definition Health
- A disability insurance definition that pays if you can’t perform the duties of your own occupation, even if you could work in another job.
- Participating whole life Life
- Permanent life insurance that may pay annual dividends from the insurer’s participating account, which can buy more coverage or reduce premiums.
- SAAQ Auto
- Société de l’assurance automobile du Québec — the public insurer that covers bodily injury from auto accidents in Quebec on a no-fault basis.
- Sewer backup coverage Property
- Optional home coverage for water damage when sewage or storm water backs up into your home through drains.
- Simplified issue Life
- Life or health insurance approved on a short health questionnaire without a medical exam, usually at higher cost than fully underwritten coverage.
- Super Visa insurance Travel
- Private medical insurance meeting IRCC’s requirements for the Parent and Grandparent Super Visa, including at least $100,000 of emergency coverage valid for one year.
- Term life insurance Life
- Life insurance for a set period (e.g. 10, 20 or 30 years) at a level premium. It pays only if you die during the term.
- Third-party liability (auto) Auto
- Mandatory auto coverage for injury or damage you cause to others. Legal minimums vary by province; most drivers carry $1–2 million.
- Universal life insurance Life
- Permanent life insurance combining coverage with a tax-advantaged investment account and flexible premiums.