What Is Insurance and How Does It Help?
When people buy insurance, they put money into a premium pool with many others. Some of that pool of money helps people who suffer an unexpected insured hardship due to loss from a home fire, vehicle collision or business interruption in that year. Payouts for these hardships are called claims.
Insurers are required by law to have sufficient funds to pay for claims. To better understand this concept, read our piece on insurer solvency.
Why Should I Have Insurance?
Insurance claims for Canadians who suffer losses from severe weather are on the rise.
To cover losses related to the multiple natural catastrophes in 2013, insurers anticipate paying out $3.2 billion in claims across the country. This number is more than double the previous year's and is the highest for insured losses in Canadian history. Natural disaster claims cost nearly $1 billion or more each year in 2011, 2010 and 2009.