The insurance you need, and the insurance you don’t

This article was updated on June 27, 2017.

Navigating the insurance industry is particularly difficult for immigrants, who may not have the same concepts back home. Rodolfo Martinez, a former financial planner who is currently the executive director of the Ontario Immigrant Network, says one of the big challenges for Mexican immigrants is auto insurance.

“Until recently, you didn’t even need to have car insurance in Mexico, so immigrants don’t understand it,” he says. Not only is car insurance mandatory for drivers in Canada, but for newcomers with no driving history here, it can cost a small fortune: Martinez says rates of $300 per month for one modest vehicle are common.

Bring your documents with you

Many immigrants aren’t aware that if they were living in the U.S. previously, they can use their insurance record there to get significantly lower premiums. Even if you’re not coming from the U.S., it’s a good idea to bring documentation with you. “When we came from Australia, we brought over as much information on our financial standing as we could and it was a huge help,” says Toni Byrnes, a 44-year-old project manager in Victoria, B.C. “We brought letters from our insurance companies saying how many years we’d been insured and how many claims we had. That helped us start out with lower premiums because we had no claims.”

Get life and disability insurance

Life insurance is a must if you work and support a spouse and children. But don’t overdo it. Think of it as “income replacement insurance” that will allow your family to get by without your paycheque. A good rule of thumb is to purchase enough life insurance to cover 10 times your income if you have kids under 10 years old (five times your income if you have kids over 10), plus the amount needed to pay off any debts. Disability insurance is also crucial. Often this is covered by your employer, but if you’re self-employed you need to take out your own policy. If you’re not supporting anyone else, you don’t need life insurance, and it doesn’t make sense to insure the lives of your children, as they have no income.

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