Most of us need some type of insurance. Different people have different insurance needs. Start by understanding what kind of insurance you need and how much coverage you should have.

Knowing your insurance options is an essential part of the financial planning process.

The first step in deciding the types and amounts of insurance you need is to determine the risks you face. If you own or lease a car, Canadian law requires you to have car insurance. If you own your own home, you will need to insure it against damage from fire and other natural disasters. If you have a family to support, you will need enough life insurance to replace your income.


The province you live in will determine the amount of car insurance you must have. The smallest coverage requirements vary. Your automobile insurance agent will guide you.

Keep in mind that the province-mandated minimum coverage may not be enough to protect you. Consider adding extra liability insurance can be inexpensive, especially when you consider the peace of mind it can give you.

If you drive a late-model car, you may want to add comprehensive and collision coverage. This insurance pays to repair your vehicle even if the accident is your fault. It may also cover the car if damaged by other circumstances and hazards. If you drive an older and less valuable vehicle, the cost of that extra coverage may not be worthwhile.


Life insurance is important, but it is not always a necessary expenditure. If you are single and have no children, you probably do not need life insurance. If you are married with a couple of kids in school, life insurance is may be essential.

The amount of life insurance coverage you need will depend in part on how much you earn and the lifestyle your family leads. One of the most important purposes of life insurance is to replace your salary if you were gone. The death benefit of your life insurance should provide enough income for your spouse to carry on and raise the children, and pay the bills.


Homeowners insurance pays to repair or rebuild your home if it is damaged by fire or other hazards. The coverage can also protect you if your home is robbed, or someone is injured while on your property. If you own your own home, you need to have sufficient insurance in place to protect the property and your finances.

If you rent an apartment, renter’s insurance provides the same type of protection. Do not assume the insurance your landlord offers will protect you and your possessions. The insurance the landlord carries protects the building, not its contents. Renter’s insurance can replace items that are stolen from your rented home or apartment. The cost is generally low enough to make it worthwhile.


Choosing the right insurance is not always easy. Evaluating your needs can make the process a lot easier. While just about everyone needs protection, you cannot assume that your insurance needs are the same as your friends and coworkers.

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