What is Insurance?


Insurance as we know it has been available in Canada for over 200 years. However, it has arguably been in place in some form since early human society, and was often spurred by events involving catastrophic losses. For example, modern property insurance policies were likely sparked from the 1666 Great Fire of London, where the medieval City of London was completely decimated.

Modern insurance has definitely evolved over time, and many insurance companies are still around today. The first insurance company in Canada, the Phoenix Assurance Company, opened for business in 1804. In 1809, two more insurers, the Halifax Insurance Company and the Quebec Fire Insurance Company, set up shop. Canada’s first mutual insurance company, the Gore District Mutual Fire Insurance Company, began operating in 1839. Some of the largest insurers today went into business in Canada later in the 1800s, including the Sun Insurance Company of Montreal (1865; today Sun Life Financial), the Economical Insurance Group (1871), and London Life Insurance (1874), among others. Canada Life Assurance Company became the nation’s first life insurer in 1846.


Insurance helps protect a policyholder’s finances. If an insured item is damaged, destroyed, lost or stolen, insurance can provide the policyholder with money to repair or replace it. In exchange for this protection, the policyholder pays a premium, a fee for coverage that the insurance company assesses monthly, biannually or annually. Insurance remains in force as long as the policyholder continues to pay the premiums, doesn’t violate any of the policy terms and does not become an excessive risk for the insurance company. Consumers and businesses can purchase insurance to protect their automobiles, homes, health and more. Insurance can also provide income in the event of disability or a lump sum to loved ones in the event of untimely death.


Tony owns a house in Edmonton, Alberta. After a large storm, the municipal sewer becomes overburdened, and some of the excess water comes up through the drain in Tony’s basement, causing a flood. Because Tony did not purchase sewer backup coverage when he bought his homeowners insurance policy, he is responsible for the entire cost of the repairs. His neighbor, Tom, did purchase sewer backup coverage. Tom only has to pay a $1,000 deductible, and his insurance company pays for the remaining repair expense. The good news is that Tony had an unfinished basement, so his repair costs were minimal. In fact, it may not have been worth the higher premium for him to purchase sewer back-up coverage. But for Tom, who has a finished basement that he uses as a media room, complete with carpeting, nice furniture and a big-screen television and other electronic equipment, the insurance was worthwhile.


Insurance products have evolved considerably since the first modern policies were available, and today you can find an insurance product to protect almost anything. Our qualified insurance brokers can help you quickly find a product that’s right for you, whether you are a homeowner, business owner, or some combination of both.

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Last updated Feb 11, 2019