25 Watline Ave,
Mississauga, On, Canada
L4Z 2Z1
What are the most important types of insurance to have?
There are many different types of insurance you should consider if you’re a working adult with a family or assets. It’s not expected that you will know what type of life insurance to buy. There are many important types of insurance you should consider.
Health insurance
We are fortunate to live in Canada, where each province has provincial coverage, in which the government covers most of our major medical expenses. Some employers offer health benefits to help cover the medical expenses that the government does not. Some benefit plans require employees to pay a premium, while other employers may cover the full cost of premiums. In either case, it’s best to have a professional review your benefits and make sure your family is adequately covered.
If you are self-employed or if your employer-provided benefits aren’t adequate, you can get independent coverage.
Auto insurance
To drive a vehicle in Canada, you are required to have car insurance. Car insurance premiums vary widely in cost. Premiums are based on how long you’ve been driving, what type of vehicle you drive, where you typically drive, where you live, what you use your car for and your driving history. You can often combine your car insurance with home insurance at the same insurer to lower your monthly premiums.
The two main types of car insurance that you are required to have, no matter which province you live in are liability insurance and accident benefits. In some provinces, additional insurance may be required as well. Make sure you have proper coverage based on the province in which you live.
Mandatory insurance
Auto Liability insurance
Liability insurance has nothing to do with protecting your vehicle. Instead, liability insurance covers any damage your vehicle causes to another person or their vehicle.
Auto Accident benefit/bodily injury insurance
This type of insurance will cover your medical expenses and loss of income in the event of an accident.
Optional insurance
Auto Collision insurance
While it’s not mandatory, collision insurance is highly recommended. It covers the cost of repairing or replacing your vehicle because of a collision.
Comprehensive insurance
Not sure what falls under comprehensive auto insurance? The other types of insurance cover damage as the result of an accident. Comprehensive covers a wider breadth of damage, including damage as the result of fire, vandalism or theft.
How to choose auto insurance that is not universal. Different vehicles and different life situations will dictate what types of optional insurance you might want or need.
Home insurance
To qualify for a mortgage, you do not require mortgage insurance, but as a homeowner you should have enough insurance to cover the cost of your mortgage, should something happen to one or both homeowners. Putting enough coverage in place, protects and provides for your family, so they can pay off the mortgage and remain in their home.
Sometimes, homeowners will let their insurance coverage lapse possibly due to financial issues and you may see charity websites where friends and family raise money to help the homeowner, when they lose everything in a fire/flood or more. Home insurance is vital to protecting your home and all of the valuables within it from damage or theft. Renters should have and are often required to have content insurance, for much the same reason. You should be aware of what types of things home insurance covers. For example, are fences covered by home insurance? It may depend on the type of policy you choose.
Comprehensive insurance
Comprehensive insurance will cover any loss of property and any contents that were lost. You will pay more for this type of insurance but you’ll be grateful you have it in the event of a loss.
Basic or named perils
Some people can’t afford or don’t want comprehensive insurance. With this type of insurance, you pick and choose what things (property or contents) you want to have covered by insurance.
Broad insurance
Somewhere between comprehensive and basic insurance falls broad insurance. With this type of policy, both your property and its contents (the contents you’ve identified) will be covered. This type of insurance is a hybrid.
Personal liability
This type of insurance covers someone injuring themselves on your property. For example, if someone who is not a member of your household trips on something left on your stairs. This insurance will cover any losses they incur because of their insurance claim.
CMHC Mortgage insurance
CMHC Mortgage insurance helps empower potential home-buyers to purchase a home with as little as a five percent down payment. This type of insurance protects both the lender and the investor if the buyer defaults. If you don’t have a large down payment, this type of insurance tells your lending institution that they have your back should you not be able to pay your mortgage. The lender, therefore, will be more willing to consider lending you money for the purchase of your home.
Title insurance
When you purchase a home, the title is transferred to your name. Having a title means you have legal ownership of the property. Title insurance protects homeowners and their lenders from any challenges to that title. That includes things such as pre-existing defects or liens on the property.
Rental insurance (Tenant Insurance)
Tenant insurance is the responsibility of the renter and is required by most if not all leases issued in Canada. Tenant Insurance covers contents, accidents, voluntary medical, fire and more, most renters don’t even give it a second thought to ensure that their belongings are protected. Renter’s insurance tends to be very affordable. Rental insurance is also called tenant insurance.
What does rental insurance cover?
Depending on the coverage you select, rental insurance covers anything from contents to personal liability, replacement costs, and living expenses should you need to vacate the premises in the event of a claim.
Life insurance
The second you start to build a family whether its getting married, moving in together or having children, you should consider getting life insurance. It is important to protect yourself and your spouse should something happen to either one of you. Consider the financial burden of planning a funeral and burial or time off work, which many people need to recover from any loss of a loved one(s). There is also the loss of income that was provided by other spouse/partner .
Ultimately, what is life insurance? Life insurance is the best way to make sure a tragic loss isn’t compounded by crippling financial responsibilities.
To know more feel free to contact us at robert@wattersonfinancial.com or call us at 6474035381
Valuable blog posts: Our blog is regularly updated with accounting advice, valuable tools, product/service information, and accounting trends.
Unmissable promotions: From time to time, we’ll share our most exclusive promotions with our newsletter subscribers. Don’t miss out!
We promise we won’t overload your inbox! Watterson Financial Solutions Inc’ email newsletter is sent out bi-monthly with only the most relevant content for you.
With several years of experience, Watterson Financial Solutions Inc is a leading accounting firm in Mississauga, Ontario. Our services include personal tax planning, business registration, business setup and consulting, bookkeeping and accounting, payroll, WSIB, HST, corporate tax, assurance, disability tax credit program, budgeting and forecasting services, insurance, mortgages, investments, real estate and legal services, business valuation services, estate planning services, litigation support and damage quantification services.
To learn more about what we do, please click here, or get in touch with us by clicking here.
Sign up for our newsletter now to stay in touch with us. Register here!
Personal Tax Planning | Business Registration | Business Setup & Consulting | Bookkeeping & Accounting | Payroll, WSIB, HST | Corporate Tax | Assurance | Disability Tax Credit Program | Budgeting and Forecasting Services | Insurance, Mortgages, Investments, Real Estate & Legal Services | Business Valuation Services | Estate Planning Services | Litigation Support and Damage Quantification Services | Staunch IT Consultants |
Share This News