What is Insurance?  People pay an amount of money (usually every month) to an insurance company. The insurance company then agrees to pay for certain things in case something happens in the future. For example, you pay a car insurance premium every month so that if you are in an accident you do not have to pay the full cost of repairs to your own and to the other car. Some types of insurance are mandatory in Canada e.g. car insurance. You can choose to buy insurance or not for other situations.

When you buy insurance you can often choose how much to pay but if you pay less you will get less back if something happens. For example, you may buy insurance that will pay for damage to another car but not for your own. This will be cheaper, but you may decide to pay more to buy insurance that will help pay for all the damage that happens.

There are different types of insurance.  The most common are:

Car Insurance

When you drive, it is possible that you may damage other people’s property, or injure – or even kill – yourself, other drivers, passengers or pedestrians.

Mandatory Insurance Coverage:  Most people don’t have the money to pay for the losses (property damage, injury, death) they might cause while driving, so governments require vehicle owners to buy a certain amount of insurance to cover any losses they might cause others to suffer (Liability).   Some governments, including those of every province and territory in Canada, also require owners to carry coverage for their own medical expenses and loss of income resulting from driving-related injuries (Accident Benefits/Bodily Injury or AB/BI).  In BC, you must purchase your mandatory auto insurance (Autoplan) from the Insurance Corporation of BC.  See: a list of local brokers.

Optional Insurance Coverage:  You can also voluntarily purchase additional Collision coverage for damage to your car insurance for your car and Comprehensive  coverage for protection against theft, vandalism and other perils.  This is highly recommended as costs can be very large if you don’t have insurance.  You can buy this Optional insurance from ICBC, but it can often be much cheaper if purchased from another vendor, such as Canadian Direct.  See:

Home and Tenant Insurance

Buying a home is probably the largest single financial investment you have ever made. For most people, their life savings are tied up in their home.  Could you possibly afford to replace absolutely everything you own if there was a fire, theft, flood, etc.?   Recovering from even a partial loss, like having your home broken into and many possessions stolen, would cost more than most people could manage on their own.  Home insurance protects you from having to pay out a huge amount at once, often at the very worst time emotionally.   See the Insurance Bureau of Canada website.

Tenants need insurance too.  If you don’t have insurance, you would be held responsible if your actions (e.g., leaving the bathtub running) caused damage to: your apartment, your neighbours’ apartments and the building itself.  Even if the landlord’s or your neighbours’ insurance covered the damage claims, their insurance companies would come to you to recover costs for repairs and/or replacement of the structure of the building  and your neighbours’ damaged property Tenant insurance protects you from having to cover these costs out of your own pocket. For more information on tenant insurance, click here.

Home and Tenant insurance can be purchased through private insurance companies.  Check the yellow pages or ask the provider of your other insurance (such as vehicle) as there is often a discount if you hold more than one policy with a company.

Health Insurance

In BC, you purchase Health Insurance from the government.  You can also purchase additional insurance from private companies through your employer’s plans, or personally.   See the Health section for more information.

Life Insurance

Some people choose to purchase Life Insurance to provide for their families in case of death.  This insurance can be purchased through financial institutions and private insurance agents.

Travel Insurance

Travel Insurance is very useful if you are travelling to other countries for vacation or work.  Medical costs and trip interruption and cancellation can incur major costs in other countries, and travel insurance is relatively inexpensive.  Travel insurance is sometimes provided by your credit card, and is also available for purchase from private Insurance companies.

Mortgage Insurance

If you have a mortgage on your home, would you or your family be able to make the payments if you lost your job or died?  That is what mortgage insurance is for.  Your mortgage holder often requires this insurance if you have a large mortgage with minimal down-payment.  You can also purchase this insurance through your financial institution and private insurance agents.


Buying insurance can be scary.  It is good to be prepared when talking to Insurance agents, so that you know what you need, and what you don’t.  It also pays to shop around, so look online and ask your friends. Here are some links: