Introduction to General Insurance

The chance of financial loss.

The cause of loss, like fire or hail.

The principle that insurance aims to compensate the victim of a loss for the exact amount of their loss, no more and no less.

The company or person who provides insurance coverage.

The individual or entity receiving insurance coverage.

The undertaking of one person to financially protect another person against potential loss. The insurer assumes the financial responsibility for the insured's losses in exchange for premiums.

Insurance coverage that aims to restore an insured person to the same financial position they were in prior to the loss, without profiting from the loss.

Insurance companies actively participate in initiatives to prevent losses and reduce their severity, often partnering with communities and organizations to promote road safety, fire prevention, and anti-theft measures.

A system where individuals pool resources to share the financial burden of unforeseen events, ensuring that losses are spread among a larger group.

The formalization of risk sharing, providing financial protection against potential losses.

Early merchants redistributed cargoes on multiple boats to mitigate risks of river travel. If one boat was lost, the loss was shared among all boat owners.

As overseas trade increased, merchants sought formal risk management solutions, leading to the rise of the marine insurance industry.

The London Fire of 1666 sparked the development of fire insurance, starting with a dentist offering fire protection for select homes.

The primary function of insurance is to share the financial losses of a few individuals among a larger pool of policyholders. This protects individuals from catastrophic costs.

Insurance provides a safety net for borrowers, making them more creditworthy. Lenders are more likely to provide financing when insurance protects against potential losses.

By transferring the risk of unexpected losses to an insurance company, individuals can focus on their ventures without fear. This encourages entrepreneurship and risk-taking.

Insurance that covers risks other than life and health, such as car accidents, property damage, and liability claims.

Insurance that covers financial losses arising from damage or loss of a vehicle, including accidents, theft, and vandalism.

Insurance that protects against financial losses due to damage to or destruction of property, such as homes, businesses, and other assets.

Insurance that provides coverage when an insured person is financially responsible for injury or damage they cause to others.

Insurance companies that are owned by their policyholders. Profits are often returned to policyholders as dividends or lower premiums.

Insurance companies owned by shareholders who invest to generate profits.

Insurance provided by government entities at various levels, including medical, employment, and workers' compensation.

The act of providing financial compensation to cover a potential loss, typically through a payment or replacement of damaged items.

Insurers employ their own salesforce who can only sell products offered by the insurer. Compensation could be through salary, commission, or a combo of both. Insurance company manages all operations.

Independent insurance offices act as brokers, representing multiple insurers. This distribution model is dominant, handling most property and casualty insurance, and even government auto plans in some provinces.

Agents represent a single insurer (and the Facility Association), but unlike brokers, they are small business owners.

A global insurance market established centuries ago, focused on high-risk and complex insurance needs, particularly maritime.

Groups of underwriting members who collectively share risks and pool resources to cover particularly complex or unique exposures.

Owned by shareholders, with a primary goal of generating profit for its investors.

Owned by its policyholders, with a focus on providing insurance services to members, profit is secondary.

These insurers dominate the Canadian insurance market, offering a range of insurance products to individuals and businesses.