1 in 3 Canadians weighing insurance cuts despite coverage gaps
The confidence gap
TD described the findings as evidence of “a growing insurance confidence gap” – a divergence between the perceived importance of coverage and consumers’ ability to evaluate or act on it. Some 62 per cent of survey respondents said they were not confident their current insurance would fully protect them in an emergency, yet many are still entertaining the idea of reducing it.
Kristen Gill, vice-president of general insurance at TD Insurance in Toronto, said the temptation to cut coverage when money is tight is understandable but carries real risk. “When budgets are stretched, it’s natural to look for places to save,” Gill said. “But reducing coverage without fully understanding what you have — or what you’d be giving up — can leave you exposed to costs that far exceed what you’d save on premiums.”
Her advice: review before you cut. Understanding the scope of existing policies, she said, is the essential first step before making any changes that could leave a household vulnerable.
Gen Z most likely to reduce and least likely to understand
Younger Canadians are bearing the sharpest edge of this dynamic. Among Gen Z respondents, 55 per cent said they would consider cutting back on insurance to relieve budget pressure; the highest proportion of any age group surveyed. At the same time, 44 per cent of Gen Z find insurance confusing, and 58 per cent have postponed reviewing their coverage altogether.
For financial advisors working with younger clients on holistic financial plans, the data signals a potential advice gap worth addressing proactively. A client who quietly trims insurance to cover a shortfall without flagging it to their advisor may be introducing significant risk into an otherwise sound plan.
