-- The TD Annual State of Insurance Report reveals Albertans' knowledge
of their insurance policies --
CALGARY, June 19, 2013 /CNW/ - Term versus life insurance, replacement
versus actual cost value - do you know the full picture when it comes
to your insurance policy? While a majority of Albertans (57%) review
their insurance policies at least once a year, new research from TD
Insurance has found that not everyone takes the time to ensure they are
According to the State of Insurance Report, an annual report
commissioned by TD Insurance to understand Canadians' habits, attitudes
and knowledge about insurance, Albertans are the least likely in the
country to ask their insurance provider to clarify details they don't
understand in their policy (61% versus 52% nationally). They wouldn't
clarify their policy because they think it is too complicated (30%),
don't have time (29%), are embarrassed of their lack of knowledge (26%)
or are simply uninterested (17%).
But Dave Minor, a vice president at TD Insurance, says it is important
to understand what protection your insurance offers in case the
"If you come across terms or conditions you are unfamiliar with in your
policy, there is no need to feel embarrassed or daunted to seek help,"
he says. "Speak with your insurance provider whose job it is to clarify
any questions you have about your policy to ensure you thoroughly
understand your coverage, rights and responsibilities as a
Thirty-four percent of Albertans admit they didn't bother to read, or
even skim, the fine print on their insurance policies. As a result, 23%
have been upset to learn that they weren't covered for something they
thought was covered, and 16% have been pleasantly surprised to find
they had more coverage than they thought.
"When you renew your insurance each year, spend some time reviewing your
coverage, too," says Minor. "Your insurance needs may change from one
year to the next and your coverage and premiums could have changed,
too. Call your insurer if you have any questions about adjustments or
if your coverage no longer reflects your lifestyle."
Minor provides three scenarios to educate Albertans on common home, auto
and life insurance questions:
Hayley bought a $5,000 antique dining room table and chairs for her home
a few years ago. Unfortunately, it was damaged when her toilet water
supply valve burst last month. She made her claim and met the
deductible, but isn't sure how much she will receive from her insurer
to replace her dining room set.
Replacement value ensures the contents of your home are insured for the amount it would
cost to replace them today. However, a standard home policy only covers
actual cash value - what you would pay for a similar item at today's costs, less
depreciation (a decrease in value due to wear and tear or age). If
Hayley has actual cash value coverage, her insurer might pay $3,800
because that is the replacement cost minus depreciation. If she had
purchased extended replacement value coverage, her insurer might pay
$5,100 because that is the cost net of deductible to buy a similar
dining room set today.
For his graduation gift, Duncan's parents gave him their 10-year-old
station wagon to drive on weekends. The car is in average condition and
is valued at $1,500. Duncan doesn't have a strong cash flow right now,
and is weighing his options for insuring it at a low cost.
Auto insurance premiums are calculated based on a number of factors,
including your driving record, what type of car you have, and how often
you drive. To save money on premiums, Duncan could increase his deductible, the dollar amount he would be responsible for when making a claim if
he was deemed at fault. Since the car is old and will be driven
relatively infrequently, Duncan could also consider dropping collision coverage. For example, if his deductible was $1,000, it may not be worth adding
collision coverage to his policy since he would likely end up covering
a majority of repair costs through his deductible. Instead, it may make
sense for him to pay for any accident damage out of his savings.
Otherwise he could, over just a few years, end up paying more in
premiums than his car is worth.
Sarah and Daniel have just made an offer on their first home and are
planning to start a family in the next few years. They want to ensure
their family home is protected in the event something unexpected
happens, and are trying to decide if they should buy life insurance now
or after they start their family.
Mortgage life insurance* pays the balance of your mortgage to the bank if a person listed on the
mortgage passes away, so loved ones are not left with debt. This type
of insurance can be purchased through your financial institution when
you sign your mortgage papers, and requires answers to just a few basic
health questions. Premiums are then combined with your mortgage
payments. Term life insurance provides coverage for a set number of years and the payout is delivered
directly to the beneficiaries who can decide what to do with it. Both
policies would give Sarah and Daniel a flexible, low-cost way to
protect their family and their home.
One of the advantages that Sarah and Daniel have when thinking about
life insurance now is that it can be more affordable since premiums are
based on life expectancy. Sarah is 29 and Daniel is 33, so they could
save on their monthly insurance premiums by locking in at a lower rate,
if they purchased it today.
"At the end of the day, insurance should give you peace of mind," Minor
said. "If you feel uncertain or have questions about the terms or
conditions within your policy, ask your insurance provider for
clarification before you sign on the dotted line."
About the TD Insurance State of Insurance Report
TD Insurance commissioned Environics Research Group to conduct an online
custom survey of 2,583 Canadians aged 18 and older, including 291
Albertans. Responses were collected from February 7 to 18, 2013.
About TD Insurance
TD Insurance offers a wide range of products to help protect clients
from the 'accidents of life' including credit protection, auto, home,
health, life, and travel insurance. With more than 3 million clients,
TD Insurance authorized products and services are available through a
network of more than 1,150 TD Canada Trust branches, the Internet and
telephone. For more information, visit www.tdinsurance.com
SOURCE: TD Insurance
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