A Changing Industry: All About Family Insurance in Canada

Comprehensive family insurance in Canada today is a million dollar industry that encompasses a large number of private and public insurance companies. These companies cover families for the many potential risks that often leave people in a financial bind, including mandatory coverage such as car insurance, and other coverage such as health, home and life insurance.

Canadian families have many options when it comes to protecting themselves against life’s unexpected dire consequences. Over time, the insurance industry in Canada has grown, developed, and changed to meet the needs of its residents, embracing current trends, and providing desired products while keeping costs under control.

Medical Care for Loved Ones: Health Insurance

Medical coverage falls under the umbrella of optional family insurance in Canada. Although Canadians are fortunate to be provided with medical coverage under provincial health plans, there are nevertheless gaps in the program that can be filled with additional private health insurance. For instance, provincial health plans do not typically cover dental or vision care, or medical expenses when travelling outside the country. Many Canadians obtain private coverage for prescription drugs if they are not among those who qualify for assistance.

Canada’s health insurance system has a long history. Saskatchewan was the first province to pass laws providing coverage in 1946, and by 1961 all the provinces had followed suit. In 1984, the Canada Health Act set forth federal standards by which provinces could receive funding from the federal government. According to a 2009 poll, more than 86% of Canadians state that they support the provincial health care system.

Health insurance in Canada has faced several challenges over time. More recently, there is a push to privatize health care in some areas, in spite of popular opinion. Canada’s health care system is relentlessly scrutinized and its policies are a topic of ongoing discussions, but in the meantime, families can obtain additional medical coverage from private insurance providers in order to fill the gaps left by provincial plans.

Public and Private: Car Insurance

One of the largest areas of family insurance in Canada is the car insurance industry, a field that has undergone much change over the years. When cars first became available in Canada, a few large companies were already offering personal lines of coverage to Canadians. One of the oldest insurance companies in the nation is the Dominion of Canada General Insurance Company, which opened its doors in 1887 and still offers auto policies and other types of coverage today.

As the need for auto insurance increased, things changed across the country. Some provinces devised their own system of public coverage, such as Manitoba’s Autopac, while others chose a public system of insurance similar to that used in the United States. With more and more cars on the road, provinces eventually passed laws requiring that all drivers carry a liability insurance policy. With insurance now mandatory, the competition for Canadians’ insurance dollars became fierce.

In time, provinces with a public system had to improve the laws in order to protect consumers from overpaying for insurance. Several provinces have now implemented maximum rates that insurance providers must adhere to, and have established control over when and how rates can be raised, in the hope of decreasing the number of people driving without insurance because they cannot afford it.

The Roof over your Head: Home Insurance

Homeowners insurance is also a major consideration when it comes to comprehensive family insurance in Canada. In time, the need for coverage grew as the cost of homes rose and more families were unable to recover from fire and other damages. At the same time, mortgage companies required some protection from substantial financial losses when homes were destroyed. Homeowners insurance is designed to protect both parties. In Canada, this type of insurance is sold by public companies in all provinces, as opposed to auto insurance which is public only in certain provinces.

Started in 1839, the Gore Mutual Fire Insurance Company is the oldest property and casualty insurer in Canada. Since that time, many more companies have opened their doors, providing Canadians with coverage to protect their homes and property from many risks including fire and theft.

Protecting Those Left Behind: Life Insurance

When you think about family insurance in Canada, one of the first things that probably pops into your mind is life insurance, most likely because of its direct human connection. Life insurance protects families from financial disaster when the main breadwinner in the household passes away unexpectedly. It offers an immediate financial cushion to a family experiencing instability, and provides them with time to recover without having to worry over finances.

Two of the oldest life insurance companies in Canada are the Canada Life Insurance Company which started in 1874, and Great West Life which started in 1881. Today, the two companies have merged to form a powerful and venerable player in the life insurance scene. Many other companies are also in the business, some of which are wholly Canadian based, while others have branches in foreign countries.

Although life insurance was once considered somewhat of a luxury for the wealthy, today it has become a vital part of family insurance in Canada, and addresses all levels of income. With so many companies selling life insurance, rates have become competitive over the years, making it easier for Canadian families to choose the coverage they need at a price they can afford.

Coverage for your Family Today

It is easier than ever to provide your family with comprehensive insurance coverage. There are multiple insurance companies operating in Canada that offer a wide range of policies for Canadian families. Although the basic three – auto, home and life- are the most common policies, other significant areas of family insurance should be taken into account, such as health insurance, travel insurance and dental and vision care insurance.

Canada’s insurance providers have grown and improved over time to keep up with the ever-changing needs of Canada’s families. Their purpose is to provide you with the comprehensive protection required to keep your family, home, quality of life and financial assets safe.

What Should I Know About Car Insurance?

Car insurance is an arrangement between you and an insurance company providing protection against financial losses that may occur as a result of a traffic accident. It is something that we all need and are required to have before we can drive our vehicles. Car insurance is currently a highly competitive market; as a result, companies are desperate to retain business. That’s why we all try to find the cheapest way to get it.

What is Coverage?

There is always a “minimum” coverage that is required on your car. This minimum does not protect you or your car. For that you need additional coverage called Comprehensive. This is why many insurance companies recommend more than the minimum. Even though you are not required to carry Comprehensive coverage, an insurer may require it. So it’s wise to talk to local insurance agents to find out what kind of coverage you need, what they have to offer and how competitive they are for your business.

What if I Have An Accident?

Auto insurance protects you and your passengers from financial hardship if you are in a car accident. You will want to make sure that you have enough insurance coverage for any injuries or damages. And as far as the financial side of things is concerned, if an accident is your fault, having the proper insurance will help you to get back on track without having to spend any money out of your pocket. It also pays for your legal bills if you cause an accident. Car insurance can also pay for damages if someone sues you after an accident occurs, but only to the limits of your liability. If you have an accident, you want the peace of mind that your insurer will provide an easy and fair claim process.

Car insurance is one of those bare necessities when you are a car owner. Car Insurance is something you just have to pay to protect yourself, your passengers, and your car against the unexpected. Finding the cheapest car insurance is a bit time consuming and getting cheap car insurance is hard to come by-but it is attainable.

How to Buy a House in Canada

When buying real estate, you do not want to make any mistakes. Being well-informed is key. If you are visiting the country, and want to buy a house in Canada, it is smart to be aware of the financial and legal aspects involved.

Find Yourself a Reputable Agent

You would not go on safari without a guide would you? The same principal applies to the purchase of real estate. Although there are no life-threatening issues at stake, there are extensive financial implications to consider, significant legal matters to examine, and various locations to choose from, all of which require a certain level guidance.

Real estate agents are ideal guides in the purchase of real estate. They prospect for the buyer, act as negotiator between buyer and seller, and advise in the completion of the transaction. They must hold a license issued by their provincial real estate board, assuring you that they are trained agents, well-informed on the subject of how to buy a house in Canada.

When you first meet with a Canadian real estate agent, it is required that he present to you a pamphlet that explains the nature of his relationship with you and the extent of his responsibilities to you. The basic obligations of the agent are to protect and promote your negotiating position at all times, abide by your instructions (providing they are lawful), respect all confidences, and account for all funds placed in their possession while acting on your behalf.

Safeguards

When you are researching how to buy a house in Canada, the security of your transaction is very important. What kind of systems are in place to ensure you do not loose your investment in a fraudulent transaction? Real estate brokers are audited once a year to confirm that they are following regulations enacted by the province. The provincial commission has the right to impose fines, suspend or revoke licenses to those who are not abiding by the rules.

Many provinces require real estate agents to have an insurance policy that protects purchasers in the event of errors and/or omissions with regard to real estate transactions. In such a case, the insurance company would typically compensate the purchaser for the agent’s mistake. Some provinces have a recovery fund to indemnify clients who are victims of fraud, resulting in a financial loss caused by a real estate representative.

Real Estate Rules for Non Residents

British Columbia, Ontario, Quebec, Nova Scotia, Newfoundland and New Brunswick pose no restrictions regarding the extent of real estate a non-resident can buy in Canada; however, some Canadian provinces limit the amount of property to foreign buyers. “On Prince Edward Island, non-resident buyers must apply to the Island Regulatory and Appeals Commission for land over 5 acres in size, or land with a shore frontage greater than 165 feet. In Manitoba, non-residents are prevented from owning farmland unless they actually plan to move there within 2 years. Non-residents may not own land over 10 acres in size in Saskatchewan, whilst in Alberta they may only own up to 2 plots of land not exceeding 20 acres in total.”

Since the tragedy of 911, a national agency called Fintrak collects data on real estate buyers, requesting their current address, passport identification, and driver’s licence in order to verify their status. The purpose is to ensure that money is not laundered in Canada for terrorist activities or other nefarious endeavors that would threaten the country’s security under the mask of real estate dealings.

Financial Recommendations

Learning how to buy a house in Canada includes knowing how to finance such a purchase. In order to determine the amount you will need to borrow, you must be aware of the purchase price, transfer tax, appraisal fees, inspection fees, insurance costs, and closing fees which constitute legal fees. Keep in mind other potential disbursements.

You should endeavor to put down as much money as you can afford towards a down payment – the larger the down payment, the lower the monthly mortgage payment. If your down payment is less than 25% of the purchase price, your mortgage loan will have to be insured with a mortgage insurance company. Since this involves another outside service, additional legal fees would be required for the loan application, and an insurance premium (a certain percentage of the loan amount) would have to be budgeted.

Canadian citizens are allowed to withdraw up to $20,000 from their Registered Retirement Savings Plan (RRSP) to buy a house, without having to pay taxes, and are permitted 15 years to reimburse this amount without having it become part of their gross annual income. It is possible that non-residents wanting to buy a house in Canada may also be able to withdraw money from their country’s equivalent of the Canadian RRSP program. It might be worthwhile to research the availability of this financial option in your country of origin.