Newfoundland Car Insurance

Yes, car insurance is mandatory in Newfoundland and Labrador, as it is in all provinces and territories in Canada.

All drivers are required to have a minimum amount of liability coverage in case they cause an accident that injures someone or damages someone’s property. In Newfoundland and Labrador, the mandatory minimum liability coverage by law is $200,000 – however, you may require an increased limit if your vehicle is leased or financed.

Especially in today’s world, we recommend always carrying an increased liability limit. In the event that your car accident goes to court and results in damages more than $200,000 – you will be responsible for paying the additional damages; and we all know that $200,000 doesn’t go as far as it used to!

New drivers in any province face higher insurance premiums than experienced drivers. However, many of the factors used to determine insurance premiums for new drivers are the same taken into account for all drivers. So, what are those factors?

• Driving records – Years licensed and insured have a big influence on insurance premiums and is the main reason new drivers pay more. Driving records also include things such as at-fault accidents and tickets, so if you continue to have a clean driving record right from the start, you should see decreasing insurance premiums as you gain experience.
• Vehicle Statistics – One factor that doesn’t matter how long you’ve been licensed is the stats on your car – how often is that type of vehicle involved in an accident? How available are parts, and what is the cost of repair if involved in an accident? How likely is that vehicle to be stolen? These all play a role when an insurance premium is calculated.
• Where you live & drive – Where your vehicle is most driven, are there a lot of car accidents? How heavy is traffic in that area? Do you hear about a lot of thefts or vandalism down the street? Factors like this are all taken into account. Most companies break provinces down into “rating territories” to assess these factors and determine the price of car insurance in that area.
• Discounts – New drivers can still qualify for discounts! Some companies offer occupation/alumni discounts, discounts for having multiple vehicles or “lines” (home/tenant insurance, car insurance, etc.) insured with the same company, credit-based discounts, and more! Check out our blog for a more detailed overview of discounts you may be eligible for.

“PLPD” stands for Personal Liability and Property Damage insurance, and is sometimes referred to “Third Party Liability” or “Liability Only”. PLPD is the only car insurance coverage that is mandatory in all provinces in Canada to operate a motor vehicle on public roads. PLPD is broken down into two types of damages:

• Personal Liability Coverage provides protection against the financial damages you may be legally responsible to pay if you cause injury or death to someone else in a car accident or claim.
• Property Damage is just what it sounds like – it provides coverage for damage you cause to someone else’s property (house, lawn, belongings, car, etc.) during a car accident or claim.

While some people opt for “liability only” coverage to save money on car insurance premiums, it is important to note that this kind of coverage does not offer any protection to your own vehicle or help with your own medical injuries or bills caused by a car accident. You can learn more about basic car insurance coverages from our blog posts:

• Car Insurance 101: Understanding Basic Coverages
• Car Insurance 102: Liability Limits and Deductibles

Collision coverage is the type of car insurance that covers physical damage to your own vehicle when it has been damaged from a collision with another vehicle or stationary object – regardless of who is at fault. Collision coverage will cover the cost of repairs to your vehicle, or if the vehicle is written off, costs to replace it (these costs can vary on your coverage and may be according to fair market value, or replacement cost of the vehicle).

Collision coverage is usually optional, but may be required if your vehicle is leased or financed, and is always a good idea!