Insurance in Canada is shaped by two things that differ from most other countries: it is regulated province by province, and in four provinces the government runs all or part of car insurance. Which coverage you are legally required to carry, who you can buy it from and where you complain if a claim goes wrong all depend on where you live. Only car insurance is required by law everywhere in Canada. The rest is required by a lender or landlord, or chosen based on what a household could not afford to lose.
What coverage is mandatory, and what most households carry
| Insurance type | Required? | Who typically carries it |
|---|---|---|
| Car insurance | Yes, in every province (minimum third-party liability of $200,000 in most provinces, $500,000 in Manitoba and Nova Scotia, and $50,000 for property damage in Quebec) | Anyone who owns or drives a vehicle |
| Home insurance | Not by law, but required by mortgage lenders | Homeowners; flood and earthquake are usually separate |
| Mortgage default insurance | Required when the down payment is under 20% | Buyers with a smaller down payment |
| Tenant insurance | Not by law, but often required by landlords | Renters |
| Life insurance | No | Anyone whose income supports dependants |
| Disability insurance | No | Working adults; replaces part of your income if you can’t work |
| Travel insurance | No | Anyone travelling outside Canada, since provincial plans pay little abroad |
| Critical illness insurance | No | A supplement for people without emergency savings |
Priorities also shift with life stage. Students and young adults usually start with tenant and car insurance; a first career adds disability and basic life coverage; marriage, a home and children raise life insurance needs; homeowners with growing assets add umbrella liability; and retirees review what they no longer need while travel medical coverage matters more.
How insurance is regulated in Canada
Insurance is regulated mainly by the provinces, and each province has its own regulator. The federal Office of the Superintendent of Financial Institutions (OSFI) also supervises federally regulated insurance companies.
| Province | Regulator |
|---|---|
| Ontario | FSRA (Financial Services Regulatory Authority) |
| British Columbia | BCFSA |
| Alberta | Alberta Superintendent of Insurance |
| Quebec | AMF (Autorité des marchés financiers) |
| Saskatchewan | FCAA |
| Manitoba | Financial Institutions Regulation Branch |
| Atlantic provinces | Each province’s own regulator (FCNB in New Brunswick) |
Two national ombudservices handle complaints once an insurer’s own process is exhausted: the General Insurance OmbudService (GIO) for home, auto and business insurance, and the OmbudService for Life and Health Insurance (OLHI) for life, health and disability insurance.
Car insurance is where provincial differences matter most. BC (ICBC), Saskatchewan (SGI) and Manitoba (MPI) have public auto insurers, and in Quebec the SAAQ covers bodily injury from car accidents alongside private insurers. Ontario, Alberta and the Atlantic provinces have private auto insurance markets. How that changes prices and coverage is explained province by province in the car insurance guide.
How insurance works
A policy is a contract: you pay a premium, and the insurer agrees to cover specific losses. The premium reflects your risk (age and health for life insurance, driving record and location for car insurance, rebuild cost and claims history for home insurance). A deductible is the part of each claim you pay yourself, and choosing a higher one lowers the premium; the trade-off is explained below. Exclusions list what a policy does not cover and matter as much as what it does.
Four documents come with most policies: the policy wording (the full contract, including the exclusions), the declaration page (your coverage amounts, deductible, premium and policy period), endorsements (changes that add coverage such as sewer backup or earthquake, or modify terms), and the renewal notice, sent before the renewal date with the new premium. The renewal notice is the point to compare prices; the reasons premiums rise are covered in why did my insurance premium go up.
You can buy through an independent broker who compares several insurers, a captive agent who sells one company’s products, directly from an insurer online, or through an employer’s group benefits plan, which often includes life, disability, extended health and dental coverage. The trade-offs are compared in insurance broker vs buying direct. When something goes wrong, the steps are in how to file an insurance claim.
Deductibles: how they work and how to choose one
Your deductible is one of the most important choices you make when buying insurance. It directly affects how much you pay in premiums and how much you pay out of pocket when you make a claim.
How deductibles work
When you file an insurance claim, you pay the deductible amount first. Your insurer pays the rest up to your coverage limit.
Example: $1,000 deductible
| Claim Amount | You Pay | Insurer Pays |
|---|---|---|
| $500 | $500 (below deductible, so no claim) | $0 |
| $1,000 | $1,000 | $0 |
| $3,000 | $1,000 | $2,000 |
| $10,000 | $1,000 | $9,000 |
| $50,000 | $1,000 | $49,000 |
Key point: If your damage is less than your deductible, the insurer pays nothing, so a claim brings no payment.
Deductibles by insurance type
Car insurance deductibles
The coverages for damage to your own vehicle (collision, comprehensive, specified perils and all perils) are subject to the deductibles set out in your policy, and a higher deductible lowers the premium. Collision and comprehensive can carry different deductible amounts. In Saskatchewan and Manitoba, the public basic plan itself covers damage to your own vehicle and sets the deductible; in Saskatchewan, for example, SGI’s basic physical damage coverage carries a $700 deductible.
Home insurance deductibles
A home policy often has more than one deductible. The main deductible applies to most claims, while optional coverages such as sewer backup, overland flood and earthquake (none of which is part of a standard home policy) can carry their own deductibles set by the insurer. The declarations page lists each one.
Condo insurance deductibles
Condo (strata) insurance is provided by two separate policies, the condo corporation’s master policy and the owner’s own policy, and each has its own deductible. Depending on the province’s condo law and the corporation’s rules, an owner can be charged part of the corporation’s costs after a loss, and unit-owner policies offer “loss assessment” coverage that pays your share, up to a stated limit.
Other insurance deductibles
Pet insurance deductibles depend on the insurer: some apply once a year, while others apply once per condition (Trupanion’s deductible, for example, is paid once for each condition over the pet’s lifetime). Details are in our pet insurance guide. Travel insurance and disability insurance are covered in their own guides.
How your deductible affects your premiums
A higher deductible means the insurer pays less on each claim, so the premium goes down. How much it goes down depends on the insurer, the coverage and your risk profile, which is why the only reliable figure is a quote at each deductible level. The worked example below shows how to compare the two.
Choosing the right deductible
The decision framework
| Factor | Choose Lower Deductible | Choose Higher Deductible |
|---|---|---|
| Emergency fund | Small or none | Enough to pay the higher deductible |
| Claims frequency | You tend to file claims | You rarely file claims |
| Risk tolerance | Prefer predictability | Comfortable with occasional large costs |
| Cash flow | Tight monthly budget | Can absorb unexpected expenses |
| Vehicle value | New/expensive vehicle | Older vehicle with lower value |
Break-even analysis
The key question: how many years of premium savings does it take to offset the higher deductible?
Example (hypothetical figures): switching car insurance collision from a $500 to a $1,000 deductible, where the insurer quotes a saving of $140 a year
| Extra deductible risk | $500 more per claim |
| Annual premium saving | $140/year |
| Break-even | 3.6 years without a claim |
With these figures, going more than 3.6 years between collision claims makes the higher deductible cheaper overall. With your own quotes, divide the extra deductible by the yearly saving.
When NOT to increase your deductible
- You do not have an emergency fund to cover the deductible
- You live in an area with a higher risk of claims (hail, flooding, theft)
- You have a history of frequent claims
- The premium savings are minimal relative to the extra risk
Common deductible mistakes
- A deductible you can’t pay. If you couldn’t pay $2,000 out of pocket after an accident, a $2,000 deductible leaves you exposed.
- Small claims just above the deductible. A $1,200 claim on a $1,000 deductible nets only $200 but may raise premiums for years; how claims feed into renewal pricing is covered in why insurance premiums go up.
- Not reviewing after life changes. If your finances improve, a higher deductible can save money every year.
- Assuming the deductible is per year. Car and home insurance deductibles apply per claim, not per year (pet insurance is the exception, where some deductibles are annual and others per condition).
Deductible strategy: emergency fund alignment
A deductible is easiest to live with when your emergency fund can cover it. A deductible larger than the cash you could raise quickly leaves a gap at exactly the moment you need the insurance, while a deductible well below your savings may mean paying a higher premium for protection you could provide yourself.
Frequently asked questions
Should I file a claim for minor damage? Compare what the insurer would pay with what the claim could cost later. In a hypothetical case, if the repair costs $1,800 and your deductible is $500, you’d receive $1,300 from insurance. But if an at-fault claim raised your premium by $300 a year for 5 years, you would pay $1,500 in extra premiums, more than the $1,300 benefit. How much a claim raises your premium, and for how long, depends on the insurer and the claim, so ask before filing. The steps for filing, if you do claim, are in how to file an insurance claim.
Do deductibles apply to liability claims? Generally not. If a guest is injured in your home and sues you, your home insurance liability coverage normally responds without a deductible, up to its limit. Deductibles apply to coverage for your own property (collision and comprehensive for auto; dwelling and contents for home).
Insurance guides by topic
Buying insurance and making claims
- Making an insurance claim
- Insurance brokers vs buying direct
- Insurance claim denied: appeals and complaints
Car insurance
- Car insurance in Canada
- Car insurance cost in Canada, by province
- Best car insurance companies
- Car insurance in Alberta
- Car insurance in BC: how ICBC works
- How car insurance works: mandatory cover and who sells it
- Car insurance in Manitoba: how MPI and Autopac work
- Car insurance for new and young drivers
- Car insurance in Ontario
- Car insurance in Quebec: the SAAQ and private cover
- Car insurance in Saskatchewan: how SGI works
- Which cars are cheapest to insure
- Collision and comprehensive coverage
- Extended car warranties: are they worth it?
- Sonnet review
- When your car is written off
- After a car accident: claims, fault and your premium
Home, condo, tenant, landlord and title
- Home insurance in Canada
- Home insurance cost in Canada, by province
- Condo insurance
- Tenant insurance
- Title insurance
- Why home insurance went up and how to lower it
Life insurance
- Life insurance in Canada
- Best life insurance companies
- Term life insurance
- Canada Protection Plan review
- Life insurance cost by age
- How much life insurance do I need
- Whole life insurance: is it worth it?
- Life insurance beneficiaries and payouts
- Life insurance for seniors
- Group life insurance through work
- Mortgage life insurance vs term life
- PolicyMe review
- Cash value and cashing out a whole life policy
- Term, whole and universal life compared
Disability, critical illness and long-term care
Health and dental
Travel insurance
Pets, liability and business
Workplace benefits
- Group benefits plans: how workplace benefits work
- Coordination of benefits
- Wellness and lifestyle spending accounts (WSA, LSA, PSA)
- Flex benefits plans and flex credits
- Health spending accounts (HSA)
- Benefits when you leave a job
Related topics
- Personal finance: financial planning, estate planning and life stages
- Mortgages: mortgage default insurance and buying a home
- Credit cards: the travel and purchase insurance built into credit cards
Browse All Insurance Articles
Browse all 10 articles in this section.
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Sources
The figures and rules on this page come from these sources, last checked against them between September 25, 2026 and November 13, 2026. How we check facts.
- Financial Consumer Agency of Canada: How much you need for a down payment
- Government of Saskatchewan: SUMMARY OF 2026-27 CHANGES TO FEES AND CHARGES
- ibc.ca: Mandatory auto coverages where you live