A new study from the Financial Resilience Institute, and funded by Co-operators, says there is a clear correlation between having adequate insurance coverage and improved household financial resilience. The study also reveals a jump in the number of Canadians unable to access help in understanding the financial implications of extreme weather.
The report, Insurance Protection as a Pathway to Improved Financial Resilience and Financial Well-Being, also finds that one in five report being impacted by extreme weather events. These households are more financially vulnerable than those that have not experienced such an event, they add.
Data-driven evidence
The model, says the Financial Resilience Institute, a non-profit organization, “provides the first data-driven evidence demonstrating the clear link between adequate insurance protection and improved levels of financial resilience and financial well-being,” says Eloise Duncan, the report’s author, CEO and founder of the institute.
The report adds that households who reported having sufficient insurance protection scored an average of 15 index points higher using the institute’s model. Resilience in the study is measured across nine behavioural sentiment and resilience indicators by the institute three times each year.
“Targeted data highlights that households reporting sufficient insurance protection are less likely to experience financial stress. With many households negatively impacted by unplanned life events, the concept of financial resilience and the criticality of adequate insurance protection has never been more important,” they write.
The correlation, they say, is clear and strong and persists across every single household income demographic.
An opportunity for the industry
They also report that just 53 per cent of households say they have sufficient insurance coverage, down slightly from the numbers reported in 2023. Nearly half, 47 per cent, said they do not have sufficient coverage – an opportunity for the industry to help more Canadians, the institute adds, as 7.1 per cent of Canadian households report being unable to access insurance altogether while 9.2 per cent couldn’t get the information or advice needed to understand the gaps in their insurance. This is a notable increase over the 5.2 per cent who reported the same in February 2024.
Among those surveyed, 7.6 per cent, up from three per cent in February 2023, said they were unable to access help in understanding the financial implications of extreme weather events.
The number of households saying they are receiving the right financial advice also declined, with just 60 per cent saying they are confident they are receiving the right financial advice, a drop from 76 per cent in February 2023.
