This paper first derives the Hicksian demand for insurance and further applies the famous Slutsky Equation to link the Marshallian and Hicksian demands for insurance. It shows that the Slutsky Equation of insurance can provide additional explanations for insurance markets. The connection between the income effect and the substitution effect in insurance markets is discussed. We further demonstrate how to apply our results both in the theory and empirical studies. We also provide some implications of our results in liability insurance market.