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How we find you the best home insurance policy in Newfoundland and Labrador

Newfoundland and Labrador is home to more than 500,000 residents and more than 250,000 private dwellings. While home insurance is not legally mandated in Newfoundland and Labrador, the majority of banks and lenders insist that mortgaged homes are covered by a policy, making home insurance practically a prerequisite for homeownership. And when you consider that owning a home is the single largest investment that most people in Newfoundland and Labrador will ever make, it’s no wonder home insurance is a must-have.

So, where should homeowners in Newfoundland and Labrador look for home insurance? With numerous providers offering a range of policies and rates, it’s critical that customers shop around before buying. Luckily, LowestRates.ca helps you do just that. By comparing the home insurance market for you — and by connecting you with qualified brokers — you’re sure to get the protection you need for the home you love.

Follow along as we answer some common questions about home insurance in Newfoundland and Labrador.

What affects home insurance rates in Newfoundland and Labrador?

Home insurance exists to protect your home and its contents against the unexpected, including fire and smoke damage, vandalism, break-ins, falling objects, vehicle impact, civil unrest, and some natural disasters. It also covers policyholders if a person is injured while on their insured property, or if they inadvertently cause damage to someone else’s property. The majority of home insurance policies in Newfoundland and Labrador also cover standalone structures on the property, such as sheds or garages. The premiums paid into home insurance policies cover the cost to fix the damage caused by pre-determined perils.

Home insurance is not based on the market value of a home; rather, it’s based on the cost to replace a home. For example, if your home would cost $200,000 to completely rebuild — even if it would sell for $300,000 — a home insurance provider would pay out $200,000 in the event of a total (and covered) loss. Thus, when determining home insurance premiums in Newfoundland and Labrador, insurers look at replacement cost, not market value.

Here are some factors that could impact home insurance premiums in Newfoundland and Labrador:

  • Property replacement value (includes the type of materials used, size and age of the home, etc.)
  • Dwelling type (detached, semi-detached, condo, townhouse, rental, seasonal)
  • Value of belongings (high-value belongings such as jewelry, artwork, or furniture may require extra coverage)
  • Construction factors such as heating source, plumbing, roof condition, and electrical distribution
  • Renovations and home upgrades
  • The primary use of home (operating a home business could impact the premium)
  • Home location (the local crime rate is a factor when determining the likelihood of a claim)
  • Certain pets — such as exotic animals — are considered high risk and can impact your premium
  • Personal claims history
  • Type of home insurance
  • Proximity to fire stations, fire hydrants, and police departments
  • Deductible amount

Risk factors in Newfoundland and Labrador

Newfoundland and Labrador is a coastal province and faces a range of adverse weather conditions. Here’s a look at some of the province’s biggest threats to homes and properties.

  • Freezing temperatures. Newfoundland and Labrador usually experience severely cold winters, resulting in potentially damaging ice damming. This occurs when a thin layer of ice forms and melts with the changing ‘freeze-thaw’ weather, thus allowing water to seep into roofs and walls. Damage caused by ice damming is often covered by home insurance policies, but not always. Be sure to ask your broker if you’re protected.
  • Overland flooding. Flooding occurs when snowmelt or severe storms cause water sources to overfill and seep into surrounding homes and structures. The resulting damage can be very costly to repair. Most home insurance policies in Newfoundland and Labrador do not cover overland flooding, backed-up sewers, or storm surges, so additional coverage is usually required.
  • Earthquakes. While uncommon, Newfoundland and Labrador does occasionally experience earthquakes. The damage can range from severe to non-existent, and most baseline home insurance policies do not cover earthquakes. To be protected against this peril, homeowners will be required to purchase additional coverage.
  • Wildfires. On average, Newfoundland and Labrador experience more than 160 wildfires per year. Early detection and aggressive firefighting keep most wildfires from causing property damage, but homes are still at risk throughout the province. Most home insurance policies in Newfoundland and Labrador cover fire damage.

Other considerations unique to Newfoundland and Labrador

While many aspects of purchasing and holding home insurance are consistent across Canada, Newfoundland and Labrador is the sole province to ban insurance providers from using credit scores as a factor when determining home insurance premiums. So even if your credit history is not where you’d like it to be, you can shop for home insurance with the confidence of knowing your premium will not be impacted.

What kind of coverage do you need in Newfoundland and Labrador?

Homeowners in Newfoundland and Labrador have different types of home insurance to choose from:

Comprehensive or All Perils. This is the most costly and most thorough type of home insurance available in Newfoundland and Labrador. Comprehensive home insurance covers the home and its contents against all perils and losses, excluding those which are explicitly left out. ‘Uninsurable perils,’ such as water damage, insect damage, and natural disasters (e.g. earthquakes), and ‘optional coverage’ (e.g. sewer backup) are not typically included in this coverage.

Basic or Named Perils. This type of coverage protects your home and its contents against specifically identified risks. It is less costly than comprehensive home insurance, but it leaves the homeowner exposed to a wider range of property damage.

Broad - This policy lies somewhere in-between basic and comprehensive insurance. It covers dwellings from most perils but only covers the contents from perils that are specifically named.

No Frills. This home insurance coverage protects properties that do not meet conventional underwriting standards. Ask your broker if ‘no frills’ home insurance is a good option for you.

Who regulates the home insurance industry in Newfoundland and Labrador?

Property and casualty (P&C) insurance in Newfoundland and Labrador is regulated by the Financial Services Regulation Division (FSRD) of Service NL, a department of the provincial government of Newfoundland and Labrador. The FSRD oversees Newfoundland and Labrador’s insurance industry and regulates rates in the province. Additionally, the FSRD protects consumers through financial education efforts and fraud prevention awareness.

If you’ve had a claim denied and you wish to appeal the decision, you can file a written complaint to the Office of the Superintendent of Insurance. However, it’s recommended you bring your complaint to the insurance company’s ombudsperson before escalating it to the provincial level.

What can you do to save on home insurance in Newfoundland and Labrador?

Here are a few ways to save on home insurance in Newfoundland and Labrador:

  • Always compare rates before purchasing.
  • Inquire about a claims protector to guard against premium increases following a claim.
  • Let your broker know about your home’s safety features, including smoke detectors, carbon. monoxide detector, sprinkler systems, and security alarms.
  • Bundle your various insurance policies with the same provider, if possible.
  • Increase your credit score — it may result in a better rate.
  • Pay annually — it’s usually a better deal than paying monthly.
  • Increase your deductible — is will usually net you a reduced premium.
  • Only make a claim for the big-ticket items — small claims can increase your premiums and aren’t always worth it after the deductible.
  • Quit smoking — it’s bad for your health and your premiums.

What companies offer the best home insurance in Newfoundland and Labrador?

Homeowners in Newfoundland and Labrador can choose between many home insurance providers, each offering unique features, coverages, and rates. Because it’s difficult to say which company is the best fit for most consumers, it’s critical that homeowners compare their options. Here are a few of the major home insurance companies in Newfoundland and Labrador:

  • TD Insurance
  • RBC Insurance
  • Intact Insurance
  • Aviva Canada
  • The Co-operators
  • Johnson Insurance

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