A new study published recently shows some Canadians are entering their insurance contracts blind and without complete knowledge of their policy. The survey from Sonnet Insurance points to one in three customers have not read their auto and/or home insurance policy.
Without reading the policy, a customer will not know what exact coverage and benefits they have. If a claim ever needs to be made, the policyholder could be in for a shock and find they are not protected for some claims.
The study sought to find the insurance literacy of Canadians. Even amongst those who do read their policy, many admit to not fully understanding the jargon included. Others say the length of the policy contract and wordy descriptions are confusing.
While there is some concern regarding deeper policy understanding, the survey found 90% of Canadians understand the basic fundamentals and concepts of home and auto insurance. For example, most understand the term deductible and 80% have enough money saved to cover the deductible on their policy.
Still, there are many insurance terms that still confuse customers, even if they are not necessarily industry jargon:
- 21% are unfamiliar with the term sewer backup
- Over 25% of respondents lack basic knowledge of overland flooding
- 40% do not know if they have protection against identity theft
- More than 25% are unsure of the benefits provided by comprehensive insurance
- 44% understand collision coverage
- 33% know what no-fault insurance means
The study was conducted by DIG Insights on behalf of Sonnet Insurance, surveying 1,260 adults across Canada, apart from customers in Manitoba, Saskatchewan, Newfoundland and Labrador, Northwest Territories, Nunavut, and Yukon.