Facing tough economic times, Canadians are cutting back on their insurance: survey

Faced with the prospect of rocky economic times, Canadians are cutting back on the insurance they are buying, a 2012 survey commissioned for TD Insurance states.

The Environics Research Group survey conducted for TD found that 42% of Canadians are less likely to purchase a new policy or buy enough insurance because of the current economic environment. The second annual TD Insurance State of Insurance Report is intended to help understand Canadians’ habits, attitudes and knowledge about insurance.

The second annual report found some Canadians have decided not to make claims in order to keep their premiums low (33%) or to avoid a high deductible (29%). Twenty-one per cent of Canadians have cancelled or forgone insurance altogether in an effort to save money.

As a result, one in five Canadians now admit they don’t think they have enough insurance (19% versus 9% in 2011).

“If you want to save money and preserve your personal finances, the last thing you should be doing is curbing your insurance coverage,” says Dave Minor, vice president of TD Insurance. “Especially in an uncertain economy, insurance is an important part of financial planning. For working families, it’s one of the best ways to ensure your assets and income remain intact in the event that something unexpected happens.”

And as times get tough, the survey found not all respondents are practising honesty as the best policy. Twenty per cent of respondents now admit they have not been completely truthful or omitted information when filling out an insurance application, compared with only 13% who reported this in the 2011 version of the survey.

The survey did find some confusion about coverage for water damage. The State of Insurance Report found that 29% of Canadians are not sure what they are covered for (versus 25% in 2011) and 64% of Canadians don’t bother to read the fine print of their policies thoroughly (compared with 83% last year).

Severe weather is also top of mind. Survey results show 70% of Canadians are concerned that a natural disaster won’t be covered by their insurance policy. As a result, many Canadians are taking precautions to help protect their homes and valuables from severe weather and natural disasters.