Insurance
Insurance is a contract between you and an insurance company.
When you buy insurance, you pay an amount of money every month or every year. The insurance company pays you if an accident happens that lowers the value of the insured item (a loss).
Insurance works by collecting small amounts of money from many people and paying the few people who have a loss. The amount that the insurance company will pay is in the contract.
People use insurance to protect themselves against big losses, like a fire or a car accident.
You must have some kinds of insurance (like car insurance) by law.
You can choose to have other kinds of insurance. Many people have insurance to protect themselves and their families from big losses.
Types of Insurance
Property insurance protects you against a loss of “things,” such as cars and homes.
For example, a fire damages your home. The insurance company pays to repair your home and to replace things that were damaged by the fire, such as furniture and clothes.
Property insurance also gives liability insurance, which pays people who get hurt or have their property damaged when you are responsible for an accident.
For example, someone falls on the ice and gets hurt because you didn’t shovel the snow out of the way. The insurance company may pay for special nursing care to help the person get better and for the person’s lost wages.
Life insurance and disability insurance protect you against lost income if the insured person dies or becomes disabled.
Health insurance pays for some expenses that the province’s health insurance doesn’t cover.
