Canadians don’t understand their home and auto insurance policies
Most Canadians don’t understand the insurance policies they have and the lack of knowledge is causing some Canadians to live underinsured while others may actually end up breaking the law.
A new Get to Know Your Insurance survey, commissioned by Allstate Canada, found that 71 percent of Canadians admit they’re “not very familiar” with their home insurance policies. Thirteen percent confessed that they did not know if their home or tenant insurance covers them for damage caused by a fire. (Allstate Canada reminds homeowners and tenants that this is a basic coverage included in all home and tenant policies.)
Auto insurance policies are just as misunderstood. The Allstate Canada survey found that 21 percent of Canadians said that after a minor accident, they would simply fix the damage to their car and send the invoice to their insurance company. (By law, Allstate Canada reminds drivers, accidents must be reported to the insurer within 24 hours.) Still, 33 percent of respondents said they are “very familiar” with their auto policy, while 54 percent said they’re just “somewhat” familiar and 13 percent said they’re “not very familiar” or “not familiar at all.”
The Allstate Canada survey also found that for auto coverages:
- Almost a quarter of Canadians (24 per cent) say they don’t know if they are covered for damage they cause in a car collision. This is standard coverage for all car insurance policies.
- Surprisingly, of the 24 per cent who say they don’t know if they have this type of coverage, 12 per cent claim to be very familiar with the specifics of their car insurance.
- 79 per cent of Canadians say they are covered for specific damage to their vehicle, but 48 per cent of these people also say they don’t know if they are covered for cracks to their windshield. Yet, specified damage coverage automatically includes coverage for cracked windshields.
- 54 per cent do not know if they are covered if they have a car collision while they were driving in the United States, but all Canadian auto policies will cover collisions that take place in the United States.
- 35 per cent of Canadians aged 18-34 don’t know if their car insurance would pay for damage or injury they caused in a collision, a basic coverage of all car insurance, compared to 15 per cent of Canadians aged 55-64 who say the same.
For their home coverage:
- 45 per cent of Canadians say they are unsure or do not know if they are insured if someone slips on ice on their property.
- Only 18 per cent know that if they cause accidental damage to a friend’s home that they are covered through their home insurance policy.
- 29 per cent of 18-34 year olds can’t say if their home or tenant insurance covers them for damages caused by a fire compared to just five per cent of Canadians aged 55-64 who are unsure
“Almost all insurance purchases are mandated, whether by the government for cars or by mortgage lenders for homes. Our concern is that some people may be purchasing policies because they have to, without putting complete thought into what they may need some day,” said Saskia Matheson, spokesperson for Allstate Canada. “We don’t expect Canadians to become insurance experts, after all, that’s what we’re here for, but our customers do tell us that the more they know about their insurance, the more confident and prepared they feel when an incident does occur.”
To encourage Canadians to better understand their insurance policies, Allstate Canada has launched its Get to Know Your Insurance campaign at goodhandsadvice.ca/learnmore. The website offers worksheets, guides, definitions and videos to help homeowners and drivers reduce the gaps in their knowledge about their insurance policies and to feel more confident in their protection.
You might also be interested in: Lying and omitting: 21 percent of Canadians under 35 don’t tell the truth on insurance applications
