The pullback comes as the national saving rate hits a two-year low of 3.5%
One in three Canadians would consider trimming their insurance coverage to save money, even as most concede they do not fully understand what their policies protect.
That finding, from a TD Insurance survey, points to a widening gap between the protection households carry and the protection they believe they have.
The survey found that 33 percent of respondents would consider reducing coverage to cut costs, while 84 percent said they do not fully grasp what their insurance does and does not cover.
According to the same poll, 62 percent are not confident their coverage would fully protect them in an unexpected event, and half said they do not know what coverage they currently hold.
Younger Canadians drive much of the trend.
Gen Z respondents were the most likely of any generation to consider cutting back, at 55 percent.
That group was also the most likely to put off reviewing their policies, at 58 percent, and 44 percent said they find insurance confusing.
The pullback lands as household budgets stay under strain.
Statistics Canada reported the Consumer Price Index rose 2.8 percent year over year in June, down from 3.2 percent in May but still adding to the cost of everyday essentials.
The agency's household saving rate slid to 3.5 percent in the first quarter of 2026, its lowest since early 2024, as spending outpaced income growth, and the ratio of credit-market debt to disposable income rose for a sixth straight quarter.
That squeeze shapes how Canadians weigh risk.
More than half of respondents, 56 percent, worry that a single unexpected expense could force difficult financial choices, according to the survey, while 71 percent fear one surprise cost could undo months of progress toward their savings goals.
"With the cost of everyday essentials continuing to rise, it's understandable that Canadians are taking a closer look at their household expenses," said Kristen Gill, vice president of general insurance at TD Insurance.
She said reviewing coverage before cutting it can help households spot gaps and avoid surprises at claim time.
Most Canadians still see the value of coverage even as they consider paring it back.
In the same poll, 85 percent called insurance an important financial safeguard, a split TD Insurance framed as a confidence gap rather than indifference.
The disconnect carries weight for advisors.
With the national saving rate near a two-year low and protection decisions being made under budget pressure rather than review, clients may be quietly reshaping a core part of their financial plans without flagging it.
