Determining your insurance needs

Decide if you need insurance

The decision to get insurance depends on your circumstances and your stage in life, such as:

Insurance can protect you and your loved ones from financial loss or hardship.

Insurance can help cover costs if something unexpected happens to:

There are many insurance products that cover different types of risks.

Understand your insurance policy

An insurance policy is a legal contract between you (the insured) and the insurance company (the insurer).

An insurance policy specifies:

Usually the policyholder is the person who owns the insurance policy. In some cases, the policyholder isn't the insured, but rather a family member or loved one.

The amount of money or benefit you'll get if you make a claim depends on:​

Make sure you understand what your insurance policy covers and doesn't cover. Ask questions about anything you don't understand.


To get insurance you pay a fee called a premium. Usually, you pay the premium monthly, quarterly or yearly. The amount you pay as a premium may change over time for some types of insurance.

The amount you'll pay as a premium is based on the probability that you'll make a claim. Insurance companies charge higher premiums to people they think are more likely to make a claim.

Generally, the amount you pay as a premium depends on factors such as:

When you pay premiums, your insurance company agrees to pay a certain amount of money for any loss or damages that your policy covers.

Impact of your credit rating on premiums

When you get car or home insurance, an insurance company can charge higher premiums based on your credit rating.

Some provinces have regulations that ban the use of credit reports and credit scores in determining insurance premiums for certain types of insurance.

These provinces are:

The Insurance Bureau of Canada(IBC) represents most home and car insurance companies in Canada. They provide standards to protect consumers when insurers choose to use credit information.

Insurance companies agree to:

To confirm if your insurance company is allowed to collect and use your credit information when determining your coverage and premiums, contact your provincial or territorial insurance regulator.


Risk is the likelihood that an insured event will happen while your policy is in effect.

For example, if you have a history of medical issues, you may pay higher life insurance premiums than someone who has few.

For example, if you have several accidents on your driving record, you may pay higher car insurance premiums than someone who has none.


Health, dental, home and car insurance policies may require that you pay a deductible. A deductible is the amount of your claim that you agree to pay before your insurance company pays the rest. The higher your deductible, the less you may pay in premiums.

For example, if you make a claim for $2,000 but you have a $500 deductible, your insurance will only cover $1,500 of your claim.


Exclusions are things that your insurance policy doesn't cover.

For example:

Riders and endorsements

You may be able to buy extra insurance at an additional cost to pay for risk that your basic policy doesn't cover. This is known as a rider or an endorsement. Ask your insurance company to find out what your policy covers and doesn't cover and for what risk you might need extra coverage.

How insurance is regulated

Insurance companies are regulated on the federal level and provincial and territorial level.

Federal insurance regulators

Federally regulated insurance companies must have a system in place to handle consumer complaints. They must be a member of a neutral third party dispute resolution system.

If you hold a policy with a federally regulated insurance company, your insurance company must give you information on:

Most insurance companies are federally incorporated. The federal government ensures that all federally incorporated insurance companies are financially sound.

Find a list of federally regulated insurance companies.

Learn how to file a complaint about your insurance provider.

Provincial/territorial insurance regulators

Your provincial or territorial regulator can help you:

Each province has its own insurance regulator. All insurance companies must follow the rules and regulations of the province or territory where they carry on business.

Provincial and territorial insurance regulators enforce consumer protection laws. They also oversee the licensing and conduct of insurance agents and brokers in their province or territory.

Provincial and territorial insurance regulators:

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