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Matt Hands, VP, Insurance and MoneySense
In Newfoundland and Labrador, car insurance is mandatory and provided by private insurance companies and brokers. The Digital Government and Service NL helps to regulate and resolve disputes for Newfoundland insurance.
Auto insurance in Newfoundland uses a no-fault system. No-fault means you can still be found at fault, but that you'll only ever deal with your own insurance company for claims. It expedites the claims process and dissuades people from taking legal action.
All the insurance companies in Newfoundland require drivers to have 3 types of car insurance, they include:
- Third-party liability - Protects against damage you cause while driving, both injuries and property.
- Accident benefits - Covers medical benefits following a traffic accident, regardless of who's at fault.
- Uninsured motorist - protects against injuries you and your family sustain in a collision with a driver who has no insurance.
- DCPD - Allows insured drivers to be compensated by their own insurer for property damages resulting from an automobile collision caused by another party. (As of Jan 1, 2020)
You can also buy optional car insurance coverage to enhance your protection, including:
- Collision - Pays to repair or replace your vehicle after an at-fault crash.
- Comprehensive - Protects your car from theft, vandalism, and the effects of bad weather.
- All Perils - Combines collision and comprehensive, and adds extra protection in case someone you know steals your car.
- Specified perils - You can name specific risks and get coverage for perils like lightning, flood, or fire.
Finally, Newfoundland insurance also offers endorsements to modify your policy.
- SEF5 - Loss of use - Insurance will pay for your rental car while your car is being repaired following a claim.
- SEF27 - Damage liability for non-owned automobiles - This allows you to port your existing coverage onto a rental car (and avoid paying rental car insurance).
- SEF39 - Accident forgiveness - Protects your driving record from one collision increasing your rates.
- CAE5 - Minor conviction waiver - One speeding ticket won't affect your insurance rates.
Drivers in Newfoundland and Labrador pay some of the highest car insurance rates, on average, in Canada. The auto insurance rates are governed by the Newfoundland and Labrador Board of Commissioners of Public Utilities. They review and report on issues as they relate to car insurance, including why there are increasing claims costs and methods to help reduce these costs.
Due to the province’s relatively expensive auto insurances pricing, it is imperative to compare car insurance quotes to ensure you’re getting the best policy to suit your needs. In fact, citizens of Newfoundland and Labrador are encouraged to compare rates and consult with industry experts before finalizing their car insurance policy.
Informed consumers help to create a more competitive market, which often leads to both better rates and service from car insurance providers.
Direct Compensation Property Damage (DCPD)
Emergency roadside assistance
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How to get cheap car insurance in Newfoundland
Shop and compare
Research which company provides cheap car insurance in Newfoundland, and also the best value for you and your vehicle. Rates may change up to four times a year, but lucky for you comparing car insurance quotes with us is free.
Stay with your current insurer
Some Newfoundland car insurance companies will give loyalty discounts to drivers who remain active with them for years. Especially if they add family members or multiple vehicles to their policy.
Bundle your policies
If you use the same insurance company for both your home and auto insurance needs, your insurer will often thank you with a dip in premiums.
Get a multi car discount
If you have multiple drivers and vehicles in the same household, by putting them all on one policy can save you money.
Increase your deductible
Your deductible is the portion you pay when settling a claim before your insurer will pay the rest. If you’re willing to double your deductible, it could save you money.
Ask about discounts
If you’re a member of a large corporation, union, or a school alumnus, it could help you get cheaper Newfoundland car insurance.
Pay premiums annually, instead of monthly
Paying monthly adds administrative costs to your insurer, so if you’re able to pay in full annually you can lower your premiums.
Maintain a good driving record
If you’re a safe driver, obey the rules of the road and drive according to road conditions you can reduce your chances of an accident. Car crashes stay on your insurance record for up to ten years and can result in higher premiums.
Install winter tires
You can save up to 3-5% simply by adding winter tires to your car.
To get the cheapest car insurance in Newfoundland, one way to achieve low rates is to take a driver's ed course while getting your license. It's a great method for young drivers to reduce car insurance premiums.
Since 1999, Newfoundland has used a Graduated License Program (GLP). The system requires each driver to progress through two educational phases in order to be considered a fully licensed driver. Once you’ve successfully completed the program, you can legally operate a car. Let’s take a quick look at graduated license program approach:
Learner's Class 5 license phase (Novice/level one) eligibility criteria:
Novice Driver (Class 5/level two) eligibility criteria:
Class 5 regular licence (or full license/level three) eligibility criteria:
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By comparing quotes from Canada's top insurance companies to find your best rate can potentially save you hundreds of dollars annually.
Recent auto insurance news in Newfoundland
In October 2023, the Newfoundland government announced plans to change the Highway Traffic Act – in an effort to encourage increased operations of ride-sharing services, such as Uber. To qualify as a driver, you'll no longer need to go through a written and road test to get your Class 4. But you'll still need two years of experience with a Class 5, along with going through a medical exam and vehicle inspection.
With these changes coming, you may be interested in becoming a ride-share driver as a means of making more cash on the side. However, you'll need to check with their auto insurance provider first as standard policies in Newfoundland don't cover commercial use of vehicles – you may need to alter your policy or shop around for a brand-new one.
With that being said, auto insurance companies that do allow for ride-share may add a commercial provision or a specific endorsement to your policy – just don't expect your car insurance rate to get any cheaper after doing so.
How much does Newfoundland car insurance cost?
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Why does car insurance in Newfoundland cost so much?
Do I need winter tires in Newfoundland?
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Matt Hands, Business Director of Insurance
With 6+ years of experience at Ratehub.ca, Matt’s focus has been on growing its newest business unit, Insurance. He is a thought leader and a valuable resource to respected publications across Canada. read full bio
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