When it comes to driving, you need 3 big things. Number one, a car. Number two, a driver’s license. Number three, insurance!

While insurance might not be the first of the three to come to mind, it’s equally as important. You might be a lot more excited about getting your new car or your new license but you can’t forget to look into a new insurance policy as well!

Whether it’s your first time purchasing auto insurance or you’re just looking for a quick refresher, we recommend having a read through this guide. Once you understand the basics, get in touch with us and we’ll get you started with the right policy for your needs.

General Info and Mandatory Coverages

First off, you need to know that every insurance policy has a limit and deductible. The limit is the maximum amount of money your insurance will pay to settle a claim and a deductible is a portion of money which you are required to pay when making a claim before the insurance company will respond. Limits and deductibles can be increased or decreased based upon your preferences, as well as company guidelines, but note that they will affect your premium (cost of your policy).

So what exactly does auto insurance protect you from? Auto insurance policies consist of different types of coverage options. Some are mandatory and others are optional based on the province you reside in. Let’s start by breaking down the mandatory coverages in Newfoundland and Labrador:

• Third Party Liability: It is the most basic type of coverage and is mandatory in all provinces and territories. Third party liability covers damage you may cause to somebody else’s property and also protects you in the event someone is injured or killed by an at fault accident caused by you.
• Uninsured Automobile: This coverage provides protection for any injuries sustained by you or any passengers if an uninsured driver is at fault. It also provides protection against any damage to your vehicle as long as the at fault uninsured driver is identified.

Enhanced Coverages

Now, let’s discuss enhanced levels of coverages which are not considered mandatory in NL. These coverages may be added to your policy for an additional cost. While not mandatory, the following coverage options are important for all car owners to consider:

• Accident Benefits: covers medical and rehabilitation expenses not covered by another medical plan. It also covers loss of income if you cannot work due to injury, funeral expenses and compensation for some family members in the event of death.
• Collision: this will cover damages to your own vehicle in the event you have a collision with an object or another vehicle and you are deemed at fault. Without collision coverage, you’re on the hook for damages to your own vehicle if you are deemed at fault in an accident. The majority of car owners opt for this coverage to be added.
• Comprehensive: this covers damages from any other perils other than by collision with another object or by upset.
• All Perils: the highest level of coverage available which includes collision and comprehensive. In addition to the coverages provided within comprehensive coverage, all perils also protects you in the event your vehicle is stolen by somebody who lives in your household, somebody you’ve hired to work for you, or somebody making repairs. Although specified perils and comprehensive coverage protect from theft, only all perils coverage will protect your car from these special cases of theft.
• Specified Perils: this coverage option does not protect against collisions but instead protects from other specific types of damage. These damages include: fire,
  theft or attempted theft, lightning, hail, rising water, earthquake, windstorm, civil disturbances, falling or forced landing of an aircraft (or its parts), and finally damage during transport on land or water (e.g. sinking of a ship, derailment of a train, burning or collision of a truck carrying the vehicle). This type of coverage may be a good option for vehicles which are being stored or are otherwise not in current use.

The Factors That Determine Your Premium

Now that you know about the different levels of coverages, let’s talk about the factors that affect how much you pay:

• The year, make, and model of your vehicle: this relates to the cost of replacement and repairs to your vehicle in the event of a claim.
• Driving record: insurance companies see your past driving record as an indication of the future. Moving violations such as speeding tickets, driving while impaired, reckless driving charges, and more will all affect the premium. Accidents in which you were determined to be at fault will also cause your premium to increase.
• Years of driving experience: the more years of experience you have behind the wheel, the lower your policy premium will be.
• Vehicle use: Your premium will also factor in the average length of your daily commute and the approximate number of kilometres you drive annually. It is important to provide accurate details and this may affect the premium charged.
• Claims history: when obtaining a quote, you’ll be asked about any claims you have made in the past. A history of at fault claims will result in a higher premium charged.
• Location: Where you live has an affect on your premium due to three main factors: level of traffic, frequency of theft/vandalism, and risk of natural disasters. The first two factors are usually based upon whether you live in an urban or rural area. If you live in an urban area, you will most likely have to pay more for your insurance than somebody who lives in a rural area. Urban areas tend to have more traffic which increases the risk of collisions. They also tend to have higher rates of break-ins, theft, and vandalism.

How You Can Reduce Your Premium

Everyone likes saving money right? Rather than opting out on coverage by choosing the cheapest available insurance policy, check out these ways you can reduce your premium:

• Increasing your deductible will lower your premium; however, you should only do so if you are comfortable with the out of pocket cost in the event of a loss.
• Decreasing your liability limit has a similar effect to increasing your deductible. The lower your limit, the cheaper your premium will be. As long as you do not suffer damages which exceed your limit, this will save you money. That being said, if damages were to occur which do exceed your limit, you could be required to pay a large amount of money out of your own pocket which you may not be able to afford.
• Continue to build driving experience and keep a clean record.
• If you have an older vehicle that you don’t intend to replace or significantly repair in the case of an accident, carefully consider opting out of physical damage coverage.
• Bundling your auto and home insurance together can reduce your premiums.
• Insuring multiple vehicles with the same insurer may earn you a discount.

What You’ll Need on Hand When Calling for a Quote

Now that you know the basics, you’re ready to request a quote! To receive the most accurate quote possible, try to have the information below on hand.

• Year, make, and model of your vehicle.
• Number of kilometers you drive annually.
• Number of kilometers you commute one way to work or school one way
• Date you purchased your vehicle.
• Date you obtained your driver’s license.
• Name of your current or past auto insurance.
• Renewal date for your current or past auto insurance.

We hope to hear from you soon! Give us a call anytime Monday to Friday between 8:30am-4:30pm. After hours, you can leave us an email or voicemail and we’ll get back to you on the next business day!