Tips For First-Time Insurance Buyers
November 16, 2023
Buying insurance for the first time in your life can be a bit daunting. There are so many different insurance providers, countless insurance policies, premiums, deductibles, coverage levels, and a whole lot more to consider.
Don’t worry—we’re here to assist. The tips presented below will help you through your first time buying an insurance policy. We’ll start with the basics and work our way up from there!
Tip 1: Understand the Terminology
Insurance policies can seem complex, but they can generally be broken down into a few basic terms:
- The premium: The monthly—or yearly—fee that you pay for coverage
- The deductible: An amount that won’t be paid when you make a claim; if, for example, you have a $500 deductible and you make a $1000 claim, you’ll only get $500 back because $500 goes toward the deductible
- What’s covered and what’s not: Most accidents are covered by most insurance policies, but all policies contain exclusions of some kind—acts of war, accidents that happen when you’re driving drunk, and other things
- Coverage limits: The maximum you can get back when you make a claim
- Co-pay or co-insurance: Some policies only pay for a percentage of the cost of a claim. A policy might, for example, only pay 80% or 50% of a claim under certain circumstances.
Tip 2: Review the Policies You’re Offered
We highly recommend working with an insurance broker (more on that later), but even if you work with an insurance agent, you need to fully understand your policy. Now that you understand the terminology, don’t be afraid to ask questions—it’s important if you’re getting car insurance, home insurance, or any other type of insurance.
The regulations for car insurance vary by province. Here in Manitoba, all auto insurance is handled through Manitoba Public Insurance—car insurance premiums are highly standardized because there’s only one insurance provider.
Some other provinces also have a public insurance provider, but others have their car insurance handled by third parties. Whether you have a public or private car insurance system, however, you need to know there are several coverages offered with most car insurance policies, including:
- Coverage for damage to your car, including damage incurred in car accidents
- Coverage for damage to other people’s property or harm to their health. This is known as liability coverage.
Your car insurance policy may cover a number of other items—here in Manitoba, for example, MPI offers a Personal Injury Protection Plan that provides income replacement and other protections if a driver is injured.
Tip 4: Work With an Insurance Broker
You’ll rarely buy insurance directly from an insurance company. Your best bet is to work with a broker.
Insurance brokers will look over policies from dozens of different companies to help you find the best coverage and save money on premiums. Even when there’s only a single auto insurance provider like MPI, your broker can help you pick the best coverage levels and types of policy for your vehicle and lifestyle.
Your broker will also help you understand your policy—they can even help you through the claims process when you make an insurance claim. They’ll give you a breakdown of the factors that influence your premium, from your driving history to how much coverage your policy provides.
Basically, brokers are the go-to people for finding and understanding your insurance policy. They have a fiduciary responsibility—a duty to you financially—to give you the best advice and information on the various plans and policies available.
Looking for your first insurance policy? Call Nation West Insurance in Winnipeg.