Most of the definitions below are provided courtesy of the Insurance Institute of Canada. Definitions provided by the Insurance Bureau of Canada are indicated with an asterisk ("*").
The language of insurance can be confusing due to the complexity of the wordings. 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.
Death Benefit
An amount set out in the policy representing the amount that will be paid in the event of death. Also referred to as "principal sum."
Debris Removal
A provision in an insurance policy most commonly found in fire insurance providing indemnification for the cost of removal of the debris after a fire.
Declaration
Statement, signed by the insured, warranting that information given by him is true.
Declarations ("Dec" Sheet)*
The portion of the insurance contract that contains information such as the name and address of the insured, the property insured and its location and description, the policy period, the amount of insurance coverage, applicable premiums, and any other information provided by the insured.
Deductible
An agreed specified sum to be deducted from the amount of loss and assumed by the insured.
Deductible Clause
A clause defining the amount of loss for which insured is liable; defines insurer's and insured's contributions to cover losses.
Deferred Premium Payment Plan
Plan providing for the payment of the premium over time.
Defendant*
The person allegedly responsible for a property loss or personal injury in a lawsuit.
Demolition Insurance
Insurance against the cost of removing the ruins of a building partially destroyed by an insured peril.
Depreciation
Reduction in value of property through use, ageing, deterioration and obsolescence.
Difference in Conditions Insurance
A policy insuring against losses not usually covered by Fire and Business Interruption polices such as those caused by flood, earthquake, landslide and other unusual accidental occurrence. Applicable mostly to large commercial and industrial organizations, and performs much the same functions in property insurance that the Umbrella Liability does for liability coverage.
Direct Billing
A system for the collection of premiums whereby the insurance company "directly bills" the insured for the premium in lieu of the conventional collection of premiums by the agent or broker. The insurer sends a statement to the agent, usually monthly, recording the premiums collected directly, and credits the agent with the commission on those items.
Direct Compensation - Property Damage (Ontario, Quebec, New Brunswick)*
Covers damage to - or loss of use of - an automobile or its contents, to the extent that the driver of another vehicle was at fault for the accident. It is called "direct compensation" because, even though someone else caused the damage, the insured person collects directly from his or her insurer instead of from the person who caused the accident.
Direct Loss*
Damage to or loss of the insured property itself. It does not include consequential loss or expenses incurred as an indirect result of the damage, such as the cost of renting replacement items while the originals are being repaired.
Direct Writer
Insurance company selling direct to the public and not through independent agents or brokers.
Directors' and Officers Liability' Insurance (D&O)*
Insurance that provides coverage for members of boards of directors against "wrongful acts," which might include actual or alleged errors, omissions, misleading statements, and neglect or breach of duty on the part of the board of directors.
Disappearing Deductible
A disappearing deductible is a dollar amount deducted from the amount of loss which is reduced as the loss increases and disappears entirely to provide full coverage when the loss reaches a certain specified figure. Deductible amounts vary from $500.00 to $5,000.00, and the limit at which the deductible disappears is usually between $5,000.00 and $25,000.00. Disappearing Deductible plans are principally associated with fire policies which thus qualify for reduced rates.
Disclaimer
A denial of liability for cause, e.g., to deny coverage under a policy on grounds that a statutory condition has been breached.
Disclosure
Act of making known something known.
Dismemberment
Loss of a limb, e.g., leg, arm, finger or eye.
Drive Other Cars Clause
A provision in an automobile policy to protect the policyholder when he is driving cars other than the one described in the policy.
Driver Training Credit
To encourage driver education courses at schools and colleges, many insurers grant premium rebates to applicants for private passenger automobile insurance who have successfully completed an approved training program.
Drive-in Claims Service
A system employed by certain Automobile insurers whereby vehicles with damage, can be driven to the local company "Drive in" Claims Office for inspection and immediate settlement of the damage claim.
Duty of Care*
The obligation that a person has to exercise reasonable care with respect to the interests of others, including protecting them from harm.
Dwelling
The living quarters occupied, or intended for occupancy, by a household.
Dwelling Coverage*
This applies to your home and "attached structures" such as a garage or carport. Permanently installed outdoor equipment on the premises, such as a swimming pool and the equipment attached to it, is usually included. Building materials for use in construction, alteration or repair of the insured dwelling or related structures on the premises are usually covered, too, if they are on the site or adjacent to it. Theft and vandalism losses during construction are usually not covered.