Saskatchewan Insurance Facts: 4 Top Myths Debunked for 2026
Your insurance decisions can greatly affect your financial future, but many Canadians rely on common insurance myths instead of facts. For example, a Ratehub study of over 1,300 Canadians showed a widespread belief that car insurance follows the driver, not the car. We want to explore these top misconceptions across home, auto, and life insurance to show you how your coverage actually works.
Table of Contents
Myth 1: Insurance Companies Always Try to Avoid Paying Claims
Understanding Claim Denials and the Cost of Silence:
16%
Steady average denial rate for property claims (CCIR 2023 Report)
5%
Consistently low denial rate for auto insurance claims over a three-year period
It’s easy to feel like insurance companies are just looking for reasons to say ‘no,’ but the numbers tell a different story.
According to the Canadian Council of Insurance Regulators (CCIR), the vast majority of claims actually go through without a hitch. Property and auto denial rates have stayed remarkably steady and low for years, which shows that the system is a lot more reliable than the rumours suggest.
“This 10% rate is not a ceiling that should not be exceeded, but rather an indicator that should trigger a reflection by the insurer. The percentage of claims denied could illustrate the need to provide better information to consumers before they buy.”
Why Claims Get Rejected
Understanding the “why” can help you avoid trouble. Companies assess claims based on policy terms, but the main reason for property and casualty denials continues to be specific exclusions or limitations in the policy.
The Rising Risk of Unreported Policy Changes:
17.2%
Denials due to failing to inform insurers of significant changes (2020)
27.0%
Denials for the same reason just one year later (2021)
While overall denial rates are low, the sharp increase in rejections due to “non-disclosure” highlights why it is vital to keep your broker updated on renovations or vehicle use changes.
The Danger of Co-Insurance
It is so important to make sure your coverage actually matches what it would cost to rebuild your home today. If your insurance limit falls too far below your home’s real value, you might trigger a ‘co-insurance’ clause. This essentially means you are stepping in as a partner with the insurance company to share the financial risk.
Think of it this way: if you only insure your home for half of what is required, the company might only pay for half of your claim, even for a minor repair. That leaves you stuck with the other half of the bill. This rule applies to homes and farms just as much as it does to businesses.
To avoid these kinds of surprises, it is worth taking a moment to learn more about your home’s insured value, or you can check out our full guide: Co-insurance Explained
Nearly 80% of Canadian homes are underinsured by an average of 27%.
This means many homeowners might face unexpected out-of-pocket costs after a major loss because their insurance doesn’t fully cover the rebuild expenses.
Myth 2: I Don’t Need Life Insurance if I’m Single
The Real Impact of Life Insurance
$9,150
Average Funeral Cost
The typical cost for final arrangements in Canada, protecting your family from sudden debt.
100%
Debt Elimination
Coverage can be designed to wipe out student loans, credit cards, and co-signed leases instantly.
Living Care
Critical Illness Support
Access funds while you are still alive to cover recovery costs if diagnosed with a serious illness.
It is a common mistake to think life insurance is only for people with a spouse or a house full of kids. In reality, life insurance is a versatile financial tool that works for you while you’re still here. Many policies include living benefits, which can step in to provide a financial safety net if you’re diagnosed with a critical illness or disability.
Instead of draining your savings to pay for treatments or rent, you can focus entirely on getting better.
Beyond your own protection, it’s worth thinking about the “financial footprint” we all leave behind. Even without dependents, most of us have obligations that don’t just disappear.
Life insurance can wipe the slate clean for your parents or siblings by covering student loans, credit card debt, or co-signed leases that might otherwise become their burden.
5 things that can cost the same
(or more) per month as
life insurance:
- 🍷
A bottle of wine - 🍱
A single subscription meal - 🏋️♂️
A fitness class - 🎵
A music streaming plan - 🍽️
One meal from a sit-down restaurant
Harvard Western Insurance
HWI
Life insurance isn’t just about a payout; it’s about buying peace of mind for the people who care about you most.
It ensures that your legacy isn’t defined by the debts you left behind, but by the thoughtful way you protected your family and friends from a difficult financial situation. If you aren’t sure how much coverage a single person actually needs, it’s a great idea to chat with a broker to find a plan that fits your specific stage of life.
Myth 3: Home Insurance Covers All Types of Damage
Standard home insurance is designed to protect you from sudden, accidental events, but it doesn’t cover everything. Based on the SGI CANADA Homeowners Broad Form, many common risks are excluded or have strict dollar limits unless you add extra coverage.
Legend: X = Always Excluded | ⊕ = Not included (Can be added for an additional premium
| Coverage Item | Status | The Reality |
|---|---|---|
| General Wear & Tear / Mold | X | Considered a maintenance issue. Standard policies exclude damage from rust, corrosion, or rot. |
| Overland Flooding | ⊕ | Standard policies exclude flood. It’s an additional endorsement. |
| Sewer Backup | ⊕ | Standard policies exclude water backing up through drains or sumps. It’s an additional endorsement. |
| Motorized Vehicles | X | Cars, trucks, and ATVs are excluded. Lawnmowers and wheelchairs are typically covered. |
| Business Property | X | Property used for trade or profession is limited (often to $5,000) or excluded if not usual to a home. |
| High-Value Items (Jewelry/Art) | ⊕ | Capped at “Special Limits” (e.g., $10,000 for jewelry theft). You must “schedule” them to cover higher values. |
Myth 4: Auto Insurance Covers Everything Related to My Car
💡
A quick note on coverage: The details below refer to optional Auto Insurance Policies (Auto Paks). While your basic Saskatchewan vehicle plate registration provides some protection, an Auto Pak is a separate policy designed to fill the gaps that basic plates don’t cover.
It is a common headache for many drivers: assuming their policy is a “catch-all” for anything that goes wrong with their vehicle. Beyond the usual exclusions like mechanical breakdowns or standard wear and tear, there are some specific gaps you should know about.
For starters, auto insurance follows the car, not the driver. If you lend your keys to a friend and they have a mishap, it’s your insurance policy that takes the hit.
What Isn’t Covered?
- Racing and Speed Events: If you decide to take your daily driver to the track, you should know that race vehicles and any damage sustained during a race, speeding event, or rally are strictly excluded from personal policies.
- Commercial Deliveries: Using your car for courier services, food delivery, or transporting goods for compensation (if it exceeds 8 hours a week) typically requires a commercial policy rather than a personal one.
- Unsafe Conditions: If you refuse to repair a component of your vehicle that has been officially identified as unsafe, your insurance provider may decline to provide coverage.
- Tire Damage from Potholes: Unfortunately, standard wear and tear or specific damage to tires( like bulging sidewalls) is unlikely to be covered. However, if a pothole causes physical damage to your car’s body or suspension, you may still have a claim through SGI. You can read more about how potholes impact your insurance here.
Does Your Auto Insurance Extend Worldwide?
Many people assume their policy follows them everywhere, but your coverage is generally limited to Canada and the United States.
If you are planning a road trip down to Mexico or you’re renting a car overseas for a vacation, your standard Auto Pak won’t apply.
Do Postal Codes Affect Rates?
This is a big one in Saskatchewan. Your basic SGI registration fees are designed to be fair; they don’t look at your age, your gender, or where you live. However, the moment you add an Auto Pak to the mix, things get more personalized. These premiums are influenced by individualized ratings, which include local risk factors tied to your postal code.
Pro-Tip: If you have a vehicle that sits in the garage for the winter, don’t just let the insurance lapse. Switching to “In Storage” coverage (Unlicensed) protects you against fire or theft while it’s off the road. Just remember, if you need to move it, you’ll need a permit and proper registration first to stay legal and covered.
Stay Connected With Harvard Western
Thanks for reading our article; I hope you enjoyed this month’s topic on Insurance Myths. Here are some more ways to access more insurance information and tips:
1.
Visit our Blog/article page each month, where we publish various insurance articles and share information on specific industry products.
2.
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Last updated:
Posted in Auto, Home & Tenant, Life & Health on November 13, 2024 by Hope Prost
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