Insurance can be complicated, but understanding these common insurance terms will go a long way in helping you understand your insurance needs and coverage.

• Flood coverage – Insurance policies have very specific definitions for various types of water damage. ‘Flood’ refers to coastal flooding from salt water, such as from tsunamis and tidal waves and is not covered under insurance. ‘Overland water’ is fresh water from rivers and lakes, or water suddenly accumulating from heavy rainfall or spring thaw. Water damage that occurs as a result of overland water can be covered through purchasing overland water protection. Finally, damage caused by water coming into your property from a sewer, septic system or sump pump is covered through sewer back-up coverage.
• Guaranteed replacement cost –This means that the insurer will cover the entire cost of replacing or repairing a property, even if it is beyond the policy limit. It does not account for depreciation.
• Mortgage Clause – This clause is included in a property insurance policy to provide protection for other loss payees that hold interest in the insured property (i.e. the mortgage lender). So in the event of a property loss, it ensures that the insurance claim is jointly payable to the policy holder and the mortgage lender.
• Identity theft – Identify theft insurance helps protect you from the cost of fraud. It covers defense costs in order to clear your name (i.e. credit history) if you have been a victim of identify fraud.
• Contents coverage – This typically refers to insurance coverage for personal belongings that you own. Contents coverage insures your personal possessions in your home, everything from your laptop to your wine collection, and your clothes.

Have questions about your insurance policy or the terms outlined above? We’re here to help! Contact your OTIP broker today at 1-800-267-6847.