One of the most important things you can do as a Canadian newcomer is to set up your finances right away.
This includes getting your insurance in place so that you’re financially protected in case of an emergency. Here’s everything you need to know to start the insurance process for your health, home, vehicle and life.
Applying for health insurance as a newcomer
One of the greatest perks about moving to Canada is the wonderful universal health care system. Canadian residents receive public health care, which means most health care costs won’t cost you anything. However, you do need to apply for a health insurance card in order to use these benefits.
Each province and territory has its own health insurance plan, and coverage can vary between areas. Some provinces require newcomers to wait up to three months to receive coverage. If you’re moving to an area that requires you to wait, you’ll need to purchase private health insurance to cover that gap. You should note that all provinces and territories will provide free emergency medical help even if you don’t have a health insurance card. If you do have a medical emergency, go to your nearest hospital.
You can research your new area’s health insurance requirements by visiting their site:
All drivers must have car insurance in Canada
Scotiabank makes financing a car as a newcomer easy and affordable, and with car insurance, you’ll be protected in the unfortunate event of a car accident or vandalism. If you own a vehicle in Canada, you’re required to have car insurance, and rates vary by area, insurer, and driver.
If possible, research insurance options before car shopping, since cars with better ratings are less expensive to insure. You can check a car’s rating through the Insurance Bureau of Canada. Keeping your credit rating healthy will also reduce the cost of your insurance policy in some areas.
It might be tempting to select the cheapest mandatory insurance coverage you can find. For most areas in Canada, the minimum requirement for liability insurance is $200,000, but $2 million of coverage is a safer choice. Take into consideration how costly an accident would be if you’re at fault. Not only will you need enough insurance to cover the other person’s vehicle repair and health costs, but you’ll also be responsible for any property damage the accident caused. If the cost of the losses or damage is more than your liability limit, you’ll need to pay the balance of the settlement yourself, and that can be a substantial amount of money.
Home insurance for new Canadians
Whether you’re purchasing a new home or renting, you’ll need insurance to protect your possessions against damage and theft. Unlike car insurance, home or tenant’s insurance isn’t required. But most mortgage lenders will require you to have home insurance before they approve a loan.
Since home insurance is an added cost, you might ask yourself if you really need it, especially if your new home purchase looks like it is in good shape. But it is often a good idea to get this form of insurance as a safety net. The hope is that you’ll never need those safety nets, but they’re there just in case something bad happens. Even if you never need to repair home damage, consider these common mishaps that can be covered by home insurance:
- An ice storm causes your power to be out for a week, and your fridge and freezer full of food rots. Some insurance companies will cover food losses due to a power outage.
- A visitor trips over an uneven spot in the lawn and twists their ankle. Insurance can cover their medical expenses and protect you from potential lawsuits.
- Your bag containing a laptop and personal jewelry is stolen from your vehicle. Your home insurance will cover vehicle theft, even if it happens far away from your residence.
If you’re renting a home, you should purchase tenant’s insurance to cover those same scenarios above. Even though you don’t own the building, your coverage as a tenant protects your personal property as well as your finances in the case of accidental damage.
Protect against the unknown with life insurance
Another optional, but essential insurance you should consider signing up for as a Canadian newcomer is life insurance. Life insurance protects your loved ones financially after you pass away. Whether you’re single, newly married, or divorced, life insurance protects those you leave behind from few financial strains like:
- Funeral costs
- Student debts: Even if you’re single and your parents took out loans for your higher education, your life insurance policy could pay those off if your parents are named as beneficiaries.
- Future education costs for your children
There are two types of life insurance — term life insurance and permanent life insurance. Term life is insurance you can secure for a set amount of time, such as 10 or 20 years. Whole life insurance is more expensive but valid for the duration of your whole life and has no limitations. Money obtained from either type of life insurance policy is tax-free and disbursed in a lump sum.
Arriving in a new country is both exciting and challenging. Scotiabank’s financial advisors are experienced with helping newcomers to Canada start off their new adventure on the right foot. Find out how as a newcomer you can open a new account, start building your credit, and even get a home or auto loan.
Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific investment and or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.