Having insurance coverage reduces the potential of financial loss from unanticipated events such as property damage, theft, illness or loss of life. An insurance policy is a contract between you and the insurance company. These policies work by having you pay a fee called a premium. In exchange, the insurance company agrees to pay you an amount as determined by the policy if the unanticipated event occurs during the term of your policy.
There are many different types of insurance available including:
- Automobile Insurance
- Life Insurance
- House Insurance
- Tenant Insurance
- Mortgage Insurance
- Travel Insurance
- Credit Balance Insurance
- Additional Health Insurance
The decision to take out an insurance policy depends on your individual circumstances and needs. Some insurance policies are mandatory. For example, each province and territory requires vehicle owners to have at least some basic vehicle insurance, but the majority of other types of insurance are optional. Take some time to review your personal circumstances and think about potential situations when you could face financial loss or damages. If you cannot afford the loss or damage, then you may want to do research and consider taking out an insurance policy.
The Financial Consumer Agency of Canada (FCAC) offers reliable and useful insurance information in Understanding Insurance Basics, an online publication that provides descriptions of some of the most common types of insurance, what is involved in taking out a policy, and what to do if you need to make a complaint. Topics covered include:
Home and property insurance: This type of insurance pays for damage to or loss of your home or property. It can also protect against damage, theft or loss of your personal possessions and may cover damage or injury to others who visit your home or property, pay for accidental damage you cause to others’ property or cover personal property stolen from your vehicle. This type of insurance is usually required as a condition of getting a mortgage. Check out the tips and information provided by the FCAC.
Mortgage insurance: This type of insurance is available to cover you if you are unable to pay your mortgage payments for reasons such as illness, accident or death. Check out the tips and information provided by the FCAC.
Life insurance: This type of insurance policy pays a cash benefit to your beneficiaries when you die. The amount of money for which you are insured and the type of insurance you buy depends on your needs. Check out the tips and information provided by the FCAC.
Home rental (tenant) insurance: This type of insurance protects you against damage to, or loss of, your possessions if you rent or lease your apartment or home from someone else. It may protect you against damage caused to other tenants for which you are responsible (e.g. water damage from a broken water heater). It may also cover personal property stolen from your vehicle. Check out the tips and information provided by the FCAC.
Vehicle insurance: Auto insurance is mandatory if you own a vehicle. All Canadian provinces and territories require drivers to have at least liability and accident benefits/bodily injury coverage. Check out the tips and information provided by the FCAC.
Health insurance: Canada ensures all Canadians have access to medical services in any part of the country, but it doesn't cover everything. There is a variety of health insurance products available that could help you pay for services that your regular health care plan does not cover; supplement your income if you suffer a major illness or severe injury; and pay for your medical expenses if you become ill while on vacation, for example. Check out the tips and information provided by the FCAC.
Travel insurance: If you have health insurance, property insurance or vehicle insurance, you may be covered while you are travelling. Your credit card may offer baggage, medical and other types of insurance. By reviewing what coverage you already have, you can determine what additional insurance you may want to get before leaving home. The “Travel” section of this Handbook provides helpful information on travel insurance.
Credit protection insurance: This type of insurance makes the minimum monthly payments on a credit card, loan, line of credit or other debt for a specified time if you cannot work due to severe injury or illness. You will still be responsible for paying the balance when you recover or after the coverage period ends. Check out the tips and information provided by the FCAC.