The province of Newfoundland and Labrador, the last to join Confederation, is the easternmost province in Canada and contains the easternmost point in North America – Cape Spear, just south of the capital city of St. John’s. The province’s car insurance system is private, with about 50 insurance companies represented in the market.
Mandatory Car Insurance Coverage
Third-party liability is required to drive a vehicle on Newfoundland roads. The province uses an at-fault system, so the driver who is to blame for an accident must shoulder the financial burden for injuries and recovery to others hurt in an incident. This is what third-party coverage protects against. The minimum amount of coverage is $200,000 to cover both personal injury and property damage, though policies with $1 million or more in coverage are common. In the case where both personal injury and property damage reach the minimum coverage amount, property damage is capped at $20,000 to assure funds for after-accident health care. Uninsured Automobile protection is also mandatory. This protects the driver and passengers when an accident occurs with an at-fault uninsured driver.
As with insurance in other provinces, coverage beyond the minimum is available. Four subsections cover loss or damage to a vehicle. All Perils coverage combines the coverage of the other three subsections and as the name suggests, it can cover virtually any damage imaginable to your car, that insurers will protect against. Subsection 2 covers damage from an accident or rollover, while subjection 3, comprehensive coverage, addresses non-collision loss, such as theft. Subsection 4 covers specific perils, such as fire, lightning or hail.
In addition, the motorist can choose the level of deductibles, or amounts that the motorist agrees to pay before insurance coverage kicks in. In general, higher deductibles mean lower rates for the insurance buyer.
Average Cost of Car Insurance
A 2011 study by the Fraser Institute compared similar coverage across Canada. Newfoundland and Labrador placed 5th of the 10 provinces, with an average annual premium of $749, under the national average of $902 per year. This is consistent with historically low car insurance premiums across the Maritimes.
A Curious Newfoundland Story
It’s rumoured that the Ford Motor Company approached Premier Joey Smallwood, offering to build the Trans-Canada Highway’s Newfoundland portion in return for 20 years of exclusive car sales in the province. Despite the amazing opportunity to develop infrastructure, Smallwood, a life-long Chevy fan, declined the offer.