Insurance: The Complete Overview

Insurance is a contract where you pay regular premiums, and in exchange, the insurer covers certain financial losses. You're pooling risk with millions of others — the premiums from many people fund the claims of the few who experience a loss.

As a young Canadian, you'll encounter several types of insurance at different life stages. Here's a quick overview of each, what it covers, and when you'll need it. We have detailed guides for each type — check them out for the full picture.

Unlike in many countries, Canada has universal public healthcare funded through taxes. Every province and territory runs its own plan — OHIP in Ontario, MSP in British Columbia, RAMQ in Quebec, AHCIP in Alberta, and so on. These plans cover medically necessary services like doctor visits, hospital stays, surgeries, and emergency care at no direct cost to you.

However, public healthcare doesn't cover everything. Dental care, vision care, prescription drugs, physiotherapy, mental health counselling, and paramedical services (massage therapy, chiropractic, etc.) are generally not covered. That's where supplementary or extended health insurance comes in. Read our detailed Health & Dental Insurance guide for the full breakdown.

You don't need every type of insurance right away. Here's a priority order based on where most young Canadians are in life:

1. 1Car insurance — legally required if you own or lease a vehicle. You literally cannot drive without it.
2. 2Tenant or home insurance — protects everything you own and provides critical liability coverage. Most landlords require it.
3. 3Health & dental — if you don't have employer or student coverage, get individual extended health to cover prescriptions, dental, and vision.
4. 4Travel insurance — get it every time you travel outside your province. Even a short US trip can result in a catastrophic medical bill.
5. 5Life insurance — once you have a partner, kids, or co-signed debt. Lock in low rates while you're young and healthy.
6. 6Disability insurance — if your income supports your household and your employer doesn't provide adequate coverage.
7. 7Critical illness insurance — a lump sum if you're diagnosed with cancer, have a heart attack, or stroke. Consider it in your 30s.
8. 8Pet insurance — if you have a pet, consider it while they're young for the best rates and fewest exclusions.

• Being underinsured to save money — Carrying the legal minimum car insurance ($200K liability) when a serious accident can result in a multi-million dollar lawsuit.
• Not reading the fine print — Assuming your policy covers something without checking. Flood damage, for example, requires a specific endorsement on most home insurance policies.
• Paying for coverage you don't need — Extended warranties, credit card balance insurance, and mortgage life insurance from your bank are almost always overpriced.
• Not shopping around — Insurance premiums can vary 30–50% between companies for the exact same coverage. Get at least 3 quotes.
• Forgetting to update your policy — Moving, getting married, renovating your home, or buying expensive items all require policy updates.
• Filing small claims — Claims under $1,000–$2,000 are often not worth filing because they can increase your premiums for years.