A Newcomer’s Guide to Types of Insurance in Canada: What You Actually Need

When my family and I got our first apartment here in Mississauga, I was surprised that our lease required us to get tenant insurance and renew it every year. I had no idea what it was for, but I soon learned it was one of the most important first steps we could take to protect ourselves.

That experience taught me that navigating the different types of insurance in Canada can be full of surprises, and it’s easy to feel overwhelmed or worried about missing something critical.

If you’re a newcomer trying to figure out what’s mandatory versus what’s just recommended, you’re in the right place. As a fellow newcomer who has spent the last three years figuring this all out, I’ve created the simple, practical guide I wish I’d had.

We’ll explore the essentials together, using official sources to make sure you have the reliable information you need to make smart decisions for your new life in Canada.

Mandatory vs. Recommended: What’s the Difference?

The first step in your personal finance education is understanding that not all insurance is created equal. Some types are required by law, while others are strongly recommended for your financial protection.

• Mandatory Insurance: This is coverage you are legally required to have. The main example is auto insurance if you own and drive a vehicle. In many cases, tenant insurance is almost always required by your landlord in your lease agreement.
• Recommended Insurance: This category includes policies that protect you from significant financial loss. This includes life insurance, disability insurance, and private health insurance, especially during your initial healthcare waiting period.

#1 Provincial Health Insurance: Your First Priority

Canada has a public healthcare system, but it’s administered by the provinces and territories. This means you need to apply for a provincial health card (like Ontario’s OHIP or B.C.’s MSP) to cover doctor visits and hospital stays.

Who Needs It: Every resident needs to apply for provincial health insurance. However, some provinces, including British Columbia and Quebec, have a waiting period of up to three months after you arrive (As of August 2025, Ontario does not have a waiting period anymore).

During this gap, you are not covered and must pay for medical services yourself. This is why securing private health insurance for newcomers to cover your first few months is a critical first step. Learn more about what to do if you need urgent care before your provincial coverage begins.

How to Get It: You must apply directly through your province’s ministry of health as soon as you arrive. You can find information on how to apply through these official links:

• Ontario: Apply for OHIP and get a health card
• British Columbia: How to Apply for MSP
• Quebec: Register for Health Insurance

Once your coverage is active, the next step in managing your health is learning about the process of finding a family doctor.

#2 Auto Insurance: Required by Law to Drive

If you plan on owning one of the many cars available in Canada, getting the right coverage is essential.

Do I need car insurance in Canada?

Yes, every province and territory in Canada legally requires drivers to have car insurance. According to the Financial Consumer Agency of Canada, you must have at least a minimum amount of coverage to drive.

Driving without a valid policy can lead to large fines and license suspension. For a full breakdown, see our future guide on getting car insurance for new immigrants.

Your insurance premium, the amount you pay, will depend on your driving record, where you live, and the type of vehicle you own , and it’s just one part of the overall costs of car ownership. It’s important to shop around for quotes to find the best rate.

#3 Tenant or Homeowner Insurance: Protecting Your Space

Whether you’re renting an apartment or starting the home buying process, protecting your space is a key part of settling in. While not always legally mandatory, many landlords will require you to have a policy as part of your lease agreement.

As part of the process of renting a home, think of tenant insurance as a safety net not just for your things, but for your wallet. The Insurance Bureau of Canada highlights that it covers your personal belongings and also provides crucial liability coverage if you accidentally cause damage to the building or if someone is injured in your unit.

Beyond accidents, having the right insurance is just as important as protecting yourself from rental scams.

#4 Life Insurance: Protecting Your Family’s Future

Your life in Canada will be full of exciting milestones. Sound budgeting is crucial, but so is planning for the unexpected. Life insurance in Canada becomes especially important after major life events that affect your family, like weddings, starting a family, or taking on a mortgage.

Who Should Consider It: If you have dependents (like a spouse or children) or a co-signer on a loan, a life insurance policy is essential. It ensures that if something happens to you, your loved ones will have financial support. This is a cornerstone of responsible parenting and family planning.

There are two main types: Term and Permanent. Term life insurance is often more affordable for newcomers and provides coverage for a set period, like 20 years. You can learn more about the details from the Canadian Life and Health Insurance Association’s guide. A licensed insurance broker can help you find the right fit.

Other Important Insurance Types to Consider

As you advance in your career and life, your needs will change. Here are a few other policies to keep in mind:

• Disability Insurance: Often called “paycheque protection,” this provides you with an income if you’re unable to work due to an illness or injury.
• Critical Illness Insurance: This provides a one-time lump sum payment if you are diagnosed with a serious illness covered by your policy, helping you manage costs while you recover.
• Travel Insurance: Your provincial health plan doesn’t cover you when you travel outside your province or Canada.
• Small Business Insurance: If you are an entrepreneur starting a small business or exploring ways to earn extra income, this is crucial for protecting you from liability and other risks. It’s a key step after completing your business-focused education.

Understanding Common Insurance Policies

When you get a quote, you’ll see terms for different types of coverage. Here’s a quick breakdown of the most common policies you’ll find within the major insurance categories.

Auto Insurance Policies

Provincial laws require a minimum amount of coverage, but you can add more for greater protection.

• Liability Coverage: This is the mandatory part. It pays for damages or injuries you may cause to another person or their property if you’re at fault in an accident.
• Collision Coverage: This covers the cost of repairing or replacing your own car if you hit another vehicle or object. It’s usually optional but recommended for newer cars.
• Comprehensive Coverage: This protects your car from non-collision events like theft, vandalism, fire, or hail.

Life Insurance Policies

This is about providing financial security for your loved ones.

• Term Life Insurance: This is the most straightforward and affordable option, making it a popular choice for newcomers. It covers you for a specific period (e.g., 10, 20, or 30 years). If you pass away during that term, your beneficiary receives the payment.
• Permanent Life Insurance: This type of policy covers you for your entire life and is typically more expensive because it builds cash value over time.

Tenant Insurance Policies

Even when you’re renting, it’s crucial to protect your belongings and yourself.

• Contents Insurance: This covers the cost to replace your personal belongings—like furniture, electronics, and clothing—if they are stolen or damaged in an event like a fire or flood.
• Personal Liability: This is a vital part of a tenant’s policy. It protects you financially if you accidentally cause damage to the building (e.g., you start a kitchen fire) or if a visitor is injured inside your apartment.

Your 3-Step Action Plan for Getting Insured

Feeling overwhelmed? Don’t be. Follow these simple steps.

1. Assess Your Needs: Start with the mandatory insurance in Canada: provincial health care first, then auto and tenant insurance if applicable.
2. Shop Around for Quotes: An insurance broker can get you quotes from multiple companies at once. When you apply, they may look at your credit scores, so it’s wise to learn how to build your credit history as a newcomer.
3. Review Annually: As your life changes—from moving to a new apartment to having a child—your insurance needs will change too. Review your coverage every year to make sure it still fits your life.

Getting your insurance sorted is a huge step in building a secure life in Canada. It might seem like a lot at first, but remember—every resident once stood where you are. Take it one step at a time, and you’ve got this.

To make it easier, we’ve created a simple checklist to track your insurance needs. Download the free Canadian Insurance Checklist to stay organized and ensure you’re protected.