Tips for Buying Insurance
Determine Your Insurance Needs
Decide on the type of insurance coverage you need, and how much coverage you need.
Purchase the right type of insurance
Make sure you get the right insurance to meet your needs. Your needs may change over time. Consider reviewing your insurance needs from time to time.
You want to make sure you have enough coverage to protect you against financial loss if something unexpected happens.
- car insurance is mandatory and could pay the cost of repairs to your vehicle if you have an accident
- life insurance could provide your family with money to support themselves when you die
- health insurance could help you cover costs that aren’t covered by your basic provincial or territorial health plan
- home insurance could cover the cost of repairs to your home if there is damage to your house, condominium or apartment
- disability insurance could replace a portion of your income if you’re no longer able to work due to an accident or illness that leaves you disabled
You may also want to have an emergency savings fund to protect you against some of the smaller financial risks.
Decide how much insurance coverage you will need.
Coverage refers to the amount of protection you’ve purchased. This is the maximum amount of money the insurance company will pay you if you make a claim for a loss or event covered by your policy.
When deciding how much car or home insurance you might need, consider the value of the item you’re insuring. Think about the full financial impact of paying for the loss or event you’re insuring against.
When deciding how much life or disability insurance you might need, consider the loss of income in your household should death or disability happen. For example, perhaps only one or no income would be coming in.
Decide how much of a deductible you’re able to pay
If you’re considering car, home or health insurance, your insurance company will ask you to choose a deductible. Choosing a higher deductible will decrease the cost of your insurance premiums because you agree to pay for a larger part of your loss.
Determine how much of a deductible you can pay if you need to make a claim.
Deductibles don’t apply to life insurance or disability insurance.
Decide if you need additional coverage
You may be able to buy extra insurance, known as a rider or endorsement, to pay for risks not covered in your basic policy.
Read your policy carefully and make sure you understand what is and isn’t covered.
Shopping around and finding the best deal
Shop around and get quotes and compare policy details, such as coverage and cost. Some policies may be cheaper but may not offer the same level of service or coverage.
If you’re a member of a union, association or club, many insurance companies offer special lower rates for group coverage. Coverage usually ends when you’re no longer a member of the group or you reach a certain age.
Before signing, read the policy carefully. Make sure you understand what your policy covers and does not cover.
Source: Financial Consumer Agency of Canada