BANKING & FINANCE
Insurance in Canada: What newcomers need to know
by | Oct 10, 2024
Protecting yourself and your family against unexpected danger and risk is what insurance in Canada is all about for newcomers to Canada and international students.
Knowing about the different kinds of insurance in Canada available to you is important even before you arrive.
Insurance is part of your personal finance portfolio. Knowing how it works is smart financial planning that can save you money and build security.
We’re here to help you find the right insurance for your new life in Canada.
For example, the first type of insurance most newcomers need to understand is renters insurance. Most landlords require it (we explain below). And then there’s health insurance plans. And for those who purchase a car for work or travel auto insurance is a must.
Why do newcomers need insurance?
Insurance is one of the key ways that newcomers to Canada can manage risks. Things can go wrong. Accidents happen. Floods happen. And you don’t want to start over financially from scratch. So, when you purchase insurance, you transfer the cost of a potential loss to the insurance company in exchange for a fee (known as the premium). Insurance companies invest the funds securely, grow, and pay out when there’s a claim.
Broker vs agent
An insurance broker is not the same thing as an insurance agent. Brokers know how insurance policies work and can access more options than an agent. This lets them pick the best rates for the coverage you need from many insurance companies.
What are insurance premiums?
An insurance premium is the amount you or your business pays for an insurance policy. Insurance premiums pay for policies that cover things like healthcare, auto, rental, home, and life insurance.
Why do I need risk insurance?
Risk insurance protects your home and property from “risks and perils.” It covers property damage or loss from accidents or unforeseeable incidents (flood, sewer backup, frozen pipes, etc.)
Renters insurance
Most renters in Canada get renter’s insurance and many landlords and buildings require it so it is highly recommended for newcomers and international students as it protects and reimburses you in the event of an emergency. When you rent your first home as a newcomer to Canada or as an international student, remember that while you DO NOT own the property, you most likely DO own the contents (furniture, electronics, personal possessions, valuables, etc.).
Renters insurance is a must-have because most landlords in Canada require and here are five reasons why you need it.
But the landlord has insurance
This is true but that only covers the building you’re living in. It does not cover your family’s belongings. The landlord’s insurance can’t always protect you from everything that could wrong in your new home in Canada. Renters’ insurance does. Learn more about why you need renters’ insurance.
Travel medical health insurance
Canada is renowned for its healthcare system, and quality healthcare is one of the reasons newcomers seek to build a life here. Government health insurance programs like OHIP in Ontario and AHCIP in Alberta let you apply for coverage once you arrive in Canada and establish your permanent residency
But, it’s smart to buy travel medical health insurance to cover unexpected medical expenses before you and your family can join a government health insurance program. Without it, you could end up paying significant out-of-pocket costs.
What's the difference between provincial health plans and medical insurance?
Once you arrive in Canada and establish your permanent residency government health insurance programs allow you to apply for coverage. But, in some provinces, there is a wait period before you are eligible for government health insurance. That’s where private insurance coverage is a good idea for both temporary visitors to Canada and people on the path to becoming permanent residents and Canadian citizens.
Who is eligible for visitor to Canada insurance?
Buying travel medical health insurance can be challenging for newcomers and international students and requires navigating the process with risk factors related to age and pre-existing health conditions. Finding the right coverage is important. It’s vital to know the basic requirements you or a loved one need before you buy a travel medical health policy.
What's the difference between provincial health plans and medical insurance?
When purchasing travel insurance, there’s no one-size-fits-all solution. As a newcomer to Canada, you need to understand your options and then select the right coverage based on key factors like age, dependants, health status, and deductible preference.
Arrive in Canada Financially Prepared
Building a strong financial foundation is vital to your success. Join this webinar to start your banking journey in Canada on the right foot!
Car insurance
At some point, most newcomers to Canada buy a car, whether to get to work, get things done, or travel. In Canada, you MUST have car insurance if you own a car or other vehicle. This insurance protects you from:
- Repair bills if your car or another vehicle is damaged or in an accident
- Liability claims if you’re responsible for an accident that injures people or damages another person’s vehicle.
Again, car insurance is a must if you own a vehicle.
Auto insurance is mandatory
In Ontario, every vehicle is required to be protected by an insurance policy. The monetary fines for not having insurance are severe. If caught driving without insurance, your driver’s license could be suspended for a year and your vehicle impounded for up to three months. It’s important to understand which car insurance is mandatory to be fully protected.
The Insurance Bureau of Canada's list of top stolen cars in Ontario. pic.twitter.com/IpGuQWC7f9
— Olú (@Olufemiloye) April 10, 2022
What does car insurance cover? An auto insurance policy is an in-depth document that describes in detail what each section protects. Always be sure to consult an insurance professional if you have any specific questions about your coverage. Read Here.
Which cities in Ontario have the highest insurance rates? While this might not be a deal breaker when choosing the city where you wish to live and work in Canada, it’s always good to know where and why auto insurance is more expensive. Read Here.
Can I insure a vehicle that is not in my name? That’s a good question for newcomers – and it’s complicated. There definitely are several different scenarios where someone, perhaps a family member or friend, might ask you to insure a car, not in your name. As always, consult an insurance professional. Read Here.
To discover more about Auto Insurance, click here.
Homeowners' insurance
Did you know that most newcomers to Canada buy a home within 3 to 5 years of arriving? It’s true. And for most of us, it’s the largest purchase we make. So, it’s smart to become familiar with homeowners’ insurance. It’s an important part of your financial security net and in many cases a requirement if you have a mortgage. Knowing how much you’ll have to pay for your coverage should be factored into where and what you buy.
Do home insurance costs vary across Ontario?
Yes, they do. There is a median value for all of Ontario but this can be misleading as many factors contribute to your homeowner’s premium.
Home insurance and natural disasters
Yes, natural disasters – ice storms in February to flooding in April to wildfires in August— happen in Canada and are devastating. Home insurance helps protect you and your family from the potential life-altering effects.
What is all-risk insurance?
All risk is one of two types of home insurance; the other is known as a “named perils” policy. The main difference is that a “named perils” policy only covers potential instances that are listed (anything else isn’t covered), whereas an “all-risk” policy covers just about everything except for specifically named exceptions.
What is mortgage insurance?
Mortgage insurance (not to be confused with home insurance) sometimes called home buyer’s insurance in Canada, is a way to help you spend less upfront yet still afford your home. Mortgage insurance helps you secure your home sooner rather than later by lowering the down payment you must make.
Basic living costs for homebuyers
No matter where you choose to live in Canada as a newcomer, these are essential living expenses for almost ALL first-time homeowners. Read Here.
Business insurance
Why do I need it? For newcomers to Canada who are entrepreneurs, business insurance can sometimes seem like an extra burden. Some business owners don’t consider business insurance a necessity. Your company has financial and legal risks even if you don’t have inventory or a retail location.
Protection for your pets
More newcomers to Canada are arriving with pets (we love pets!). Dogs, cats, and whatever. Pet insurance has increasingly become more important, regarding pet health and owner liability.
Your dog is legally your “property” which can come with a fair amount of liability exposure if you’re not careful. For that reason, dog bites usually fall under the purview of your personal liability insurance, which is a part of your home insurance policy. Because of this liability exposure, advise your insurance broker (and landlord!) that you have a dog.
Finding the best pet health insurance depends on your pet’s situation and the coverage.
Other resources
If you would like to know more about insurance in Canada, here are some helpful links:
- Insurance blogs
- Insurance Bureau of Canada
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