J.D. Power and Associates Reports: Many Canadians are Under-Insured or Not Covered from Catastrophic Loss From Earthquake or Flooding

TORONTO, Nov. 1, 2012 /CNW/ - Recent severe weather and environmental events, such as Hurricane Sandy and the earthquakes in British Columbia, highlight that many Canadian insurance customers lack catastrophic loss coverage, according to the J.D. Power and Associates 2012 Canadian Home Insurance StudySM released today.

The study finds that 35 per cent of Canadian insurance customers add flood coverage to their home insurance policy, while only 22 per cent add earthquake coverage, leaving a large percentage of insurance customers without coverage in the occurrence of a catastrophic event.

"Home insurance customers who discover the limitations of their basic coverage after a major event occurs, have waited too long. With more than two in three Canadian home insurance customers uninsured for these catastrophic events, many may find themselves in a lengthy discussion with their insurer in the event of a disaster, such as a flood or earthquake," said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. "In the case of flood claims, it is a common misperception among homeowners that their basic home insurance policy provides this coverage."

A regional comparison shows that 31 per cent of insurance customers in both the Quebec and Western regions purchase earthquake coverage, while only 10 per cent do so in the Atlantic/Ontario Region.  Specifically, insurance customers in the province of British Columbia have the highest penetration of earthquake coverage, primarily due to the region's susceptibility to earthquakes. However, only 56 per cent of customers in this province state they purchase earthquake insurance.

"In comparison, earthquake-prone states in the United States, such as California, have far fewer home insurance customers carrying earthquake insurance on their policy, only 21 percent," said Bowler. "In fact, the national average of U.S. insurance customers who have earthquake insurance is 6 per cent, which is 16 percentage points lower than the Canadian national average."

As all three regions of Canada have areas of coastal exposure, flood insurance is purchased nationally at a higher rate than earthquake insurance. Customers in the Quebec Region have the highest rate of purchasing flood insurance at 44 per cent, compared with 37 per cent of Western Region customers and 28 per cent of customers in the AtlanticOntario Region.

Customers appreciate the extra peace of mind in having these types of environmental events covered, as satisfaction levels are notably higher among customers who purchase flood and/or earthquake policies from their insurer. Among customers who do not have either a flood or earthquake policy with their insurer, overall satisfaction is 763 (on a 1,000-point scale). However, among customers who do purchase at least one of these policies, satisfaction is 780. Among customers who purchase both policies, overall satisfaction is 808—which is 45 points higher than among customers who do not purchase either of these policies.

Canadian Home Insurance Rankings and Results
The study measures customer satisfaction with home insurance companies by examining five factors: billing and payment; claims; interaction; policy offerings; and price.

While satisfaction has increased in each region, the degree of improvement and key drivers vary. Customer satisfaction with home insurers has improved the most in the Atlantic/Ontario Region to 760, up a significant 21 points from 2011. Increased satisfaction with billing and payment, policy offerings, and interaction are primary contributors to improvement in this region, compared with 2011. Overall satisfaction in the Western Region (754) has increased by 12 points year over year due to increases in both policy offerings and interaction. Overall satisfaction in the Quebec Region has stayed level year over year, increasing 1 point to 809 from 2011.

Western Region:
BCAA ranks highest in this region with a score of 788. Following BCAA in the rankings are Canadian Direct (762) and Johnson Insurance (756).

Atlantic/Ontario Region:
Belairdirect (778) ranks highest in the Atlantic/Ontario Region. State Farm and Co-Operators follow in the rankings with scores of 769 and 768, respectively.

Quebec Region:
Le Capitale (834) ranks highest in the Quebec Region, closely followed by Belairdirect (829) and Personal (827).

The 2012 Canadian Home Insurance Study is based on responses from more than 7,716 home insurance customers. Survey data was collected from May through June 2012.

  

Customer Satisfaction Index Ranking   J.D. Power.com Power Circle Ratings
Western Region        For Consumers
BCAA 788   5
Canadian Direct 762   3
Johnson Insurance 756   3
Western Average 754   3
Intact Insurance 752   3
Co-operators 748   3
Alberta Motor Association 746   3
Wawanesa 745   3
RBC Insurance 738   3
Dominion of Canada 735   2
TD Insurance 728   2
Aviva Insurance 724   2
SGI 718   2
Personal 699   2



       

Customer Satisfaction Index Ranking   J.D. Power.com Power Circle Ratings
Atlantic/Ontario Region    For Consumers
Belairdirect 778   5
State Farm 769   4
Co-operators 768   4
Intact Insurance 765   4
Johnson Insurance 762   3
Economical Insurance 761   3
Atlantic/Ontario Average 760   3
Allstate 759   3
CAA Insurance Company 754   3
Personal 754   3
RSA 746   2
RBC Insurance 745   2
Wawanesa 742   2
Dominion of Canada 741   2
TD Insurance 737   2
Aviva Insurance 735   2

         

Customer Satisfaction Index Ranking   J.D. Power.com Power Circle Ratings
Quebec Region     For Consumers
La Capitale 834   5
Belairdirect 829   5
Personal 827   4
L'Union Canadienne 817   4
Promutuel 817   4
Industrial Alliance 816   3
National Bank Insurance 811   3
SSQ General 810   3
Quebec Average 809   3
Desjardins General Insurance 806   3
Aviva Insurance 792   2
Intact Insurance 790   2
TD Insurance 764   2



About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing performance improvement, social media and customer satisfaction insights and solutions.  The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies:
McGraw-Hill announced on September 12, 2011, its intention to separate into two companies: McGraw-Hill Financial, a leading provider of content and analytics to global financial markets, and McGraw-Hill Education, a leading education company focused on digital learning and education services worldwide. McGraw-Hill Financial's leading brands include Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, J.D. Power and Associates and Platts, a leader in commodities information.  With sales of $6.2 billion in 2011, the Corporation has approximately 23,000 employees across more than 280 offices in 40 countries. Additional information is available at http://www.mcgraw-hill.com/.

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpower.com/corporate


SOURCE: J.D. Power and Associates

For further information:

J.D. Power and Associates Media Relations Contacts:
Beth Daniher; Cohn & Wolfe; Toronto, Canada; (647) 259-3279; beth.daniher@cohnwolfe.ca
Gal Wilder; Cohn & Wolfe; Toronto, Canada; (647) 259-3261; gal.wilder@cohnwolfe.ca
John Tews; J.D. Power and Associates; Troy, Mich; (248) 680-6218; media.relations@jdpa.com