Glossary of Terms - Automobile Insurance
	(Go to Auto Insurance Home Page)
accident benefits	covers an injured person for medical and funeral expenses, lost income resulting from a collision, and collisions with uninsured motorists, even though fault or negligence cannot be proven.
actual cash value	is the replacement cost of property damaged or destroyed at the time of loss, with deduction for depreciation. Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy, nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.
actuary	is a professional skilled in analysis, evaluation and management of statistical information. Actuaries calculate premiums and claim reserves.
adjuster	is a person who investigates and settles losses for an insurance carrier.
agent	is a licensed person or organization authorized to sell insurance from more than one insurance company.
Alberta Insurance Council	is the regulatory body responsible for licensing and discipline of insurance agents, brokers and adjusters in Alberta. The Council derives its authority under a delegation from the Minister of Finance. The Council also investigates complaints into the action of insurance companies in the province.
broker	is a licensed person or organization paid by you to look for insurance on your behalf.
cancellation	is the termination of insurance coverage during the policy period.
cancellation (flat)	is the cancellation of a policy as of its effective date, without any premium charge.
cancellation (pro-rata)	is when the policy is terminated midterm by the insurance company, the earned premium is calculated only for the period of coverage provided.
cancellation (short-rate)	is when the policy is terminated prior to the expiration date at the policyholder's request. Earned premium charged would be more than the pro-rata earned premium. Generally, the return premium would be approximately 90 percent of the pro-rata return premium.
claim	a report of an incident that may be covered by the policy.
collision coverage	is auto insurance that covers loss to an insured's own automobile caused by its collision with another vehicle or object, or by rollover, but which does not cover bodily injury or property damage liability resulting from the collision.
continuously insured	insurance coverage being in effect from an insurer or multiple insurers at all times, without a break or lapse in coverage at any time for any reason.
deductible	is the portion of a claim you pay out of pocket before the insurance company pays. A higher deductible will lower your premium and you do not have to carry the same deductible for comprehensive and collision coverage.
endorsement	are additions or deletions that can be included in your auto insurance policy. For instance, there is an endorsement that can exclude a certain person from driving your car. Once an endorsement is added it takes precedent over the original insurance policy agreement. This is also referred to as a “rider”.
file and use system	In a “file and use system”, the insurance company can use a premium rate structure as soon as it files it with the regulatory authority. The purpose of a “file and use system” is to monitor, rather than approve premium rates.
insurance premium	is the amount of money an insurance company charges for insurance coverage.
no-fault system	is an insurance system where your insurance coverage pays for your injuries regardless of who caused the accident.
risk	is the chance of loss and is a term used to designate an insured or a peril insured against.
Section B Medical and Rehabilitation Coverage	all reasonable expenses incurred within two years from the date of the accident as a result of such injury for necessary: medical, surgical, chiropractic (maximum $750), dental, hospital, psychological, physical therapy, occupational therapy, massage therapy (maximum $250), acupuncture (maximum $250), professional nursing and ambulance services and, in addition for other services and supplies that are, in the opinion of the insured's medical advisor, essential for the treatment or rehabilitation of the injured person, to the limit of $50,000 per person.
third-party liability	is coverage that insures against an accident that damages someone else’s property, or injures or kills someone else.
tort	is a legal definition for an act that causes injury or damage arising from negligence.
underwriter	is a person who decides if an insurance risk is acceptable. He/she decides in what amount and what terms the insurance company will accept the risk.
underwriting	is the process of selecting applicants for insurance and classifying them according to their degrees of insurability so that the appropriate premium rates may be charged. The process includes rejection of unacceptable risks.