Higher costs are taking a toll on Canadians, with many considering cutting back on or skipping insurance plans, a new survey from TD Bank released Tuesday shows.
One-third of Canadians (33 per cent) say they would consider reducing their insurance coverage to save money, the TD Insurance survey says.
The high cost of everything else causing a strain on their budgets is the reason, said Kristen Gill, vice-president of general insurance at TD Insurance.
“With the cost of everyday essentials continuing to rise, it’s understandable that Canadians are taking a closer look at their household expenses,” Gill said.
“When budgets are stretched, it’s natural to look for places to save,” she added.
Affordability pressures are mounting. More than half (56 per cent) said they are worried that one unexpected expense could force them to make difficult financial choices, while a little more than seven in 10 (71 per cent) say just one surprise expense could undo months of progress toward their savings goals.
The insurance gap is sharper among younger Canadians, with more than half (55 per cent) of Gen Z respondents saying they are likely to cut back on insurance to reduce pressure on budgets.
Among Gen Z respondents, around 58 per cent said they have insurance plans but are putting off reviewing them, while another 44 per cent said insurance was too “confusing” to navigate.
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Confusion around insurance isn’t just something young people grapple with, as 84 per cent of all respondents said they don’t fully understand what their insurance does and doesn’t cover.
More than six in 10 (62 per cent) said they aren’t confident their coverage would fully protect them in an unexpected situation.
Skipping insurance can be risky, Gill said, adding that it not only protects what you own today but also helps you prepare for the unexpected.
“Without the right coverage, an unexpected event could mean dipping into savings that were set aside for other goals. Reviewing your coverage regularly and asking questions can help ensure your protection reflects your current needs and gives you greater confidence in the coverage you have,” she said.
The consequences could be more dire for homeowners, said Brett Weltman, spokesperson for the Insurance Bureau of Canada.
“No insurance could mean you could lose the financing on your home,” Weltman said.
“Having no insurance would mean the property owner will be financially responsible for all damage costs from a peril,” he said, adding that this could be anything from hail damage to your roof or getting sued if someone gets injured on your property.
Insurance costs in Canada have been on the rise. According to Statistics Canada, Canadian homeowners paid 3.9 per cent more in June for home and mortgage insurance compared with the same time a year ago.
The simplest way to keep your insurance costs low is to shop around, the Insurance Bureau of Canada says on its website.
“Ask about discounts and bundle your policies. If you own a car, get a home insurance quote from your car insurance provider. Companies often offer discounts when you ‘bundle’ your home and car insurance together,” it says.
Consider paying your premium annually, so you can save money by avoiding potential service or interest charges by paying your premium in installments, the website adds.
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