Understanding home insurance can be challenging, whether you’re a first-time or a longtime homeowner. There are so many coverage options, risk factors, and insurance companies it can get overwhelming.
A good knowledge of the home insurance landscape in Newfoundland helps you make informed decisions and choose the policies that fit your protection requirements.
Discover the different types of insurance coverage in Newfoundland, the most expensive places for home insurance in the province, how to save money on your policy, and more.
Why Do I Need Home Insurance in Newfoundland?
You don’t “need” home insurance in Newfoundland, because it’s not a legal requirement for homeowners. However, it’s a good idea to have home insurance because it protects yourself and your property. Here are three common reasons people get home insurance in Newfoundland:
Loss or damage protection
Your home is prone to damage from various causes like fire, storms, and theft. Home insurance can give you the funds you need to repair or replace the damage done by various perils.
Your mortgage lender may require borrowers to take home insurance policies. Lenders do this to protect their investments. Check our mortgage page to find the best rates for your home purchase.
Many home insurance policies offer liability coverage, which can help you pay for legal expenses if somebody gets injured on your property.
How Does Home Insurance in Newfoundland Work?
Home insurance in Newfoundland works by giving you financial coverage for your home if certain unforeseen events happen. If your home is damaged due to an event covered in your policy, you can file a claim to receive funds to repair or replace the damage. Tenant insurance and condo insurance work the same way – the only major difference is the your dwelling type.
There are three types of home insurance policies available for Newfoundland residents. Here’s an overview:
This is the cheapest insurance coverage option that’s sometimes known as named perils. As the name implies, it only covers damage caused by specific risks or perils stated in the policy and nothing else. For instance, if you choose “theft” as your named peril, you won’t receive coverage if your home was damaged in a fire.
This is the mid-price option that usually protects your home’s physical structure from most perils. However, it offers limited protection to the contents of your home, only protecting it from specifically named perils.
This is the most expensive and most complete type of home insurance. Comprehensive coverage protects your home and its contents from all perils except for those that are explicitly left out of the policy. You can purchase extra coverage to protect yourself from these policy exclusions.
Your typical Newfoundland home insurance policy comes with the following coverages. Here’s a quick look at what each item does:
- Additional living expenses: This pays for the costs of living away from home in case an insured peril damages your dwelling.
- Detached private structure: This pays for damages to any detached structures on your property, like tool sheds, pool houses, and standalone garages.
- Dwelling building: This pays for damages to your main dwelling building and all of its attached structures. It also covers swimming pools and permanent outdoor installations like children’s playsets.
- Personal liability: This pays for lawsuits against you if somebody gets injured on your property.
- Personal property: This pays for damage to your personal belongings and the home’s contents. However, especially items like artwork or jewellery may need extra coverage.
- Voluntary medical payments: This pays for medical fees for any injuries on your property for up to one year after the incident.
- Voluntary property damage: This pays for damages to somebody else’s property caused by you or a household member.
In addition to the basic home insurance coverage in Newfoundland, you can get extra protection for your home. Here are some common additional home insurance coverage you can find in Newfoundland:
- Credit/debit card forgery and counterfeit: This coverage protects you from financial losses caused by credit card theft, forgery, and counterfeiting.
- Earthquake: This coverage protects you from earthquake damage to your property and its contents.
- Freezer food: This coverage reimburses you for any damage to food caused by freezer failure.
- Identity theft: This coverage reimburses the costs incurred after an identity theft incident.
- Lock replacement: This coverage pays for your lock replacement after a theft.
- Mass evacuation: This coverage pays for extra living expenses if you have to evacuate your home.
- Overland water: This coverage pays for damages caused by flooding due to overflowing bodies of water or spring thaw.
- Sewer backup: This coverage pays for damages caused by sewer water backing up into your house.
What Is Not Included in a Typical Home Insurance Policy?
Even if you’ve opted for a highly comprehensive home insurance policy, there are some risks that insurers explicitly don’t include as a covered peril. These are called “exclusions” by home insurers.
Here are the most common home insurance exclusions:
If your home was damaged due to criminal activity, it won’t be covered by your insurance policy.
Damage from tenants
Generally, home insurance companies require specific coverage for homeowners/landlords who plan to rent out their properties. A standard home insurance policy won’t include coverage if you rent your home out and the tenant causes damage.
Most policies exclude this risk, but you can cover earthquake losses and damage as an add-on to a standard policy.
Failure to maintain your home
Damage or losses caused by poor home upkeep (e.g., clogged storm drains, broken bannisters) won’t be covered, as your insurer deems it your responsibility to manage wear and tear.
Flooding is typically not covered by a standard policy, but it may be included as an add-on.
Home business activities
Home businesses will need separate home-based business insurance to cover home or equipment damage.
Because this is considered a preventable risk, most insurers don’t cover insect damage.
Mortgage or property taxes
These are separate expenses handled by policy owners as they’re unrelated to your home insurance policy.
Mould caused by poor home maintenance is typically excluded by home insurance policies. Note that this is separate from mould caused by an insured peril, which will be covered by your policy.
Vacant dwelling risks
Many insurers may void your insurance if you leave your home vacant for a prolonged period.
This is by no means an exclusive list of risks typically excluded from a home insurance policy in Newfoundland. Talk to your home insurance provider to see what’s covered by your policy in case of loss or damage.
What Determines the Cost of Home Insurance in Newfoundland?
The cost of home insurance in Newfoundland varies depending on several considerations, such as your zip code, your property type, and even your credit score. Here are some of the different cost factors for home insurance in Newfoundland:
Detached private structures like tool sheds, pool houses, and gazebos may increase your home insurance premiums. Further, a pool typically increases your premiums because of the increased risk of drowning, as well as the extra cost of maintaining a surrounding fence and lock. Make sure your home insurance covers all of your detached structures.
The majority of Canadian provinces use your credit score to determine your home insurance premium. This is because it’s often perceived that a bad credit score increases the risk of providing home insurance, as it increases the odds of late or non-payment of premiums.
If your home is older, in poor condition, or needs to update systems like heating and plumbing, it may be pricier to insure. This is because older electrical, heating, and plumbing systems increase the risk of certain accidents like fires and water damage from leaks.
If you live in an area prone to natural disasters like earthquakes or flooding, your premiums may be higher. Insurers also tend to charge higher premiums in areas where more homeowners have filed claims over recent years.
Replacement cost is based on how much it would cost to rebuild your home at its present condition and value. The higher your home’s present value, the more expensive it is to insure. Note that when factoring in replacement cost, you’ll need to inform your home insurer of any expensive items or upgrades like jewellery or artwork which will need extra coverage.
Past Claims History
Simply put, the more claims you have in a 10-year period, the higher your monthly premiums will be. As a general rule, make sure that the cost of your potential claim is higher than your policy deductible, which is the amount you have to pay before your insurer covers the rest.
Some insurance providers will ask you to disclose the number, type, and breed of any pets you may have, as some pets are considered an additional liability risk.
Whether you live in a condo unit or a single-detached home, different types of dwellings will be evaluated differently by an Newfoundland insurer as each comes with different risks.
Renovations And Improvements
Some improvements can lower or increase your home insurance premiums. For example, converting a room into a home theatre may increase your home’s present value, so your premiums may go up. On the other hand, improvements that increase home safety like an alarm system may lower your premiums. Note that you should tell your home insurer both before and after you renovate your Newfoundland home.
The average asphalt shingle roof will begin to wear down after approximately 10 to 15 years. Unless it’s properly maintained and repaired, your roof may increase the risk of letting water leak in and damage your house. Newfoundland home insurers may lower your quotes if they see that your home’s roof is made with high-quality, durable materials.
Smoking Or Non-Smoking Policyholders
If you’re a non-smoker, an insurer may offer lower premiums as they consider it less likely that a cigarette or other smoking device will start a fire in your home.
While conducting business in your home won’t always increase your home insurance premiums, this depends greatly on the kind of business you’re running. For example, you can expect to pay more if you’re listing your home for short-term rentals or running a home-based catering company because there is more risk of liabilities or accidents.
Type Of Coverage You Choose
If you get a policy with a higher deductible, this will result in a lower premium. Additionally, the higher the coverage and the more risks you are protected against, the higher your premiums will be.
Your Chosen Insurer
Different insurers may offer varying quotes even for the same type of policy. Coverage costs vary between companies, so it’s important to shop around to find the best deal.
Common Risk Factors for Homeowners in Newfoundland
Newfoundland and Labrador is often exposed to adverse weather conditions because it’s a coastal province. Here are some things you should watch out for as a homeowner in Newfoundland:
Extreme Cold Temperatures
Newfoundland is known for its extremely cold winters, increasing the risk of ice damming. Ice damming happens when a thin layer of ice forms and melts into your roofs and walls, causing water damage. Ice damming damage is usually covered by home insurance policies in Newfoundland, but it differs from insurer to insurer. Ask your broker whether you’re protected from ice damming damage.
Melting snow or severe storms can cause bodies of water to overfill and flood. Flood damage can be expensive to repair, but many home insurance policies in Newfoundland don’t protect you from them. You might need additional insurance coverage to protect your home from floods.
Earthquakes aren’t common in Newfoundland, but they do happen occasionally. You should get additional earthquake coverage on your Newfoundland home insurance policy if you don’t want to risk it.
Newfoundland experiences about 160 wildfires per year on average, so it’s a common risk to homes in the province. While aggressive firefighting usually keeps them at bay, your home may still be at risk. Fortunately, most Newfoundland home insurance policies come with protection from fire damage.
How You Can Get Cheap Home Insurance in Newfoundland
If you’re trying to save money on your preferred home insurance coverage, here are some important steps to take:
Comparison shopping between different providers will help you find the best rate for your desired policy type. Use an insurance aggregator like MyChoice to get and examine immediate quotes from various Newfoundland home insurers.
Increase your deductible
You can ask your insurer if you can increase your deductible, a.k.a. the amount you pay before your insurer pays out the claim. Increasing this reduces the risk for your insurer that you’ll submit a claim, so they may offer to lower your premiums.
Bundle with auto insurance
Some companies offer bundled home and auto insurance at a good discount for both policies.
Renovate old home systems like wiring and plumbing
Renovating to remove known risks like faulty wiring and old plumbing may help reduce your premiums.
While hefty annual premium payments may be daunting, some insurance providers give you a discount in exchange as it reduces their administrative costs.
Install monitored alarms
The safer you make your home against thieves, the higher the chances that you’ll go claim-free. This may convince your home insurer to offer lower premiums. Install monitored home security systems to deter break-ins and get immediate notifications of disturbances.
Does Where You Live in Newfoundland Affect Your Home Insurance?
Where you live in Newfoundland affects your home insurance. If you live in an area that exposes your home to more risks, your home insurance quotes may be higher than similar homes in safer areas. For instance, St. John’s is prone to flooding from the Waterford and Rennie’s Rivers, which may make home insurance costs more expensive than in less flood-prone areas.
Census Data – Housing Data in Newfoundland
What does the average home in Newfoundland look like, and what is its condition? The 2021 Census of Population has answers to those questions and more. Let’s dive into our overview of housing in Newfoundland:
Type of Occupied Dwelling
Single-detached houses are the most popular type of dwelling in Newfoundland, making up 72.3% of the province’s homes. Duplex apartments come in second at 12.3%, while apartments in buildings less than five storeys at 5.5% are the third-most-popular type of housing.
Owner vs Renter Stats/Condo vs Non-Condo Owner
Around three-quarters (75.7%) of Newfoundland homes are owned, with 24% being rented homes. Only 2.5% of the province’s homes are condominiums, while the rest (97.5%) are non-condominiums.
Private Dwellings by Period of Construction: New or Older Homes?
31.9% of homes in Newfoundland were built between 1961 and 1980. Around 18.2% of the province’s homes are older, being built in 1960 or earlier. Homes built after 2000 are rarer, only making up 12.9% of the province’s total homes.
Major Repairs or Just Maintenance Needed?
An overwhelming majority of Newfoundland homes are in good condition, with 94.5% of them only needing regular maintenance and small repairs. Homes that need major repairs are considerably uncommon, only making up 5.5% of the province’s dwellings.
Who Provides Home Insurance Quotes in Newfoundland?
There are different ways that you can get a home insurance quote in Newfoundland. Here are the four providers that you can use or contact for home insurance rates:
Insurance brokers can represent you as a buyer and get quotes from multiple insurance companies, as well as advice on choosing a policy.
A direct writer is an insurance company that doesn’t have independent agents offering their quotes and policies. Typically, direct writers offer their products through their official websites and/or their call centres.
Insurance agents are independent professionals who can provide quotes and policy information from the companies they work with.
Insurance aggregators are online platforms like MyChoice that allow you to compare rates and coverage options from multiple providers. Because these allow you to input your information and receive quotes from multiple providers in one place, this can save you time and effort.
FAQs About Home Insurance in Newfoundland
How much is home insurance in Newfoundland?
The average cost of home insurance in Newfoundland is about $718 annually depending on the type of dwelling, location, and other factors. Home insurance costs differ between home insurance providers. Note that several considerations can increase or decrease the cost of your Newfoundland home insurance, such as your home’s value and the property’s condition.
For a better overview of the cost of home insurance in Newfoundland, talk to an insurance broker or look up quotes on MyChoice.
Is home insurance mandatory in Newfoundland?
No, home insurance isn’t mandatory in Newfoundland. However, if you take out a mortgage on your home, your lender may require you to get coverage as a condition of getting a loan.
It’s also highly recommended that you get home insurance even if it’s not mandatory, so you can protect your house and personal property in case of unforeseen events like fires and hailstorms.
Do I need home construction insurance in Newfoundland for my renovation?
Yes, if you’re planning a major home construction or renovation project in Newfoundland, home construction insurance will protect you and your home during the process.
Also known as builder’s risk insurance, home construction insurance provides coverage in the event of damage or loss to your home and construction materials during the construction process. Some companies that offer this policy type even have liability coverage in case someone gets injured on your property during construction.
What is the home insurance claims process in Newfoundland?
The home insurance claims process in Newfoundland varies between insurers, but it generally consists of the following steps:
– Report the claim: Contact your insurer and inform them about the damage or loss, including relevant details and evidence like videos or photos.
– Claim evaluation: Your insurer will assign an adjuster, who will schedule an assessment of the value of any loss or damage.
– Approval or denial: After the home inspection and evaluating your documentation, your insurer will either deny your claim or approve it, offering a settlement for repairs or replacement of damaged property.
– Claim resolution: If you accept the offer, the payment will be made. If not, you can negotiate with your insurer or file a dispute with the Financial Services Regulatory Authority of Newfoundland (FSRA).
Can you cancel home insurance in Newfoundland?
Yes, you can cancel your home insurance policy in Newfoundland. The process may vary depending on your insurer and policy terms.
Generally, you’ll need to contact your insurance provider to let them know. Some insurers may require written notice of cancellation by mail or email.
Keep in mind that if you cancel your policy before its expiry date, you may be subject to penalties or cancellation fees.
Do I need home insurance for Airbnb in Newfoundland?
Yes, you may need home insurance for Airbnb in Newfoundland. While Airbnb has some host protection insurance, its coverage is limited and may not cover all types of liabilities or damages if you’re using your home for short-term rentals. Having a home insurance policy can provide additional protection and peace of mind.
Note that renting out your property as an Airbnb without telling your insurer may void your policy, and not all home insurance policies include coverage for short-term rentals. Check with your home insurance company to see if your policy has this protection or if you need to get additional coverage.
I have a vacation home in another city in Newfoundland. Can I insure that home too even if I don’t always live there?
Yes, you can insure your vacation home in another city in Newfoundland even if you don’t always live there. There are insurance policies specially tailored to cover seasonal or vacation homes to protect your property, belongings, and other liabilities from damage or loss.
Typically, these policies offer coverage for damages due to risks like fire, theft, and water damage. They may also have coverage for additional situations such as temporary living expenses if a covered risk makes your vacation home uninhabitable.
Home insurance companies have different requirements and limitations for vacation home insurance. In some cases, you may be required to take out additional coverage or accept different terms and conditions.
Is fire insurance mandatory in Newfoundland?
No, fire insurance is not mandatory in Newfoundland. However, it’s highly recommended that property owners get it to cover damages or loss to their property caused by fire, smoke, and other related perils.
Note that some Newfoundland mortgage lenders may require borrowers to have fire insurance coverage as a loan condition. This is because the property is collateral for the loan, and the mortgage lender may require coverage to protect the property from loss or damage.
Can I bundle home insurance with auto insurance in Newfoundland?
Yes, you can bundle home insurance with auto insurance in Newfoundland. Insurance companies typically offer bundled packages, and getting one can lead to big cost savings. It can also be more convenient for managing your insurance policies and premium payments, so you should compare bundles between insurers to see what discounts and levels of coverage they offer.
It’s my first time owning a house in Newfoundland. What type of home insurance should I get?
Before choosing a home insurance policy, first-time homeowners should consider the following factors:
– Financial capability
– Risk of exposure to specific risks in their area, such as flooding or earthquakes
– Home value and condition
If you’re on a low budget and live in an area that isn’t prone to natural disasters or crime, a basic policy may be enough for your needs. But if you want to cover all your bases, comprehensive home insurance will help you rest easy.
Talk to your insurance provider to find the best option for your budget and the coverage you need.
Who has the best home insurance rates in Newfoundland?
There’s no definitive company that offers the “best” home insurance rates in Newfoundland. This is because different providers will have their own processes for assessing the cost of providing coverage, so premiums vary from company to company for the same homeowner-applicant.
To find the best Newfoundland home insurance rates, compare offers through MyChoice’s home insurance calculator. We can help you find the most affordable options on the market.
Will I be charged if I switch home insurance providers in Newfoundland?
Yes, you may be charged if you switch home insurance providers in Newfoundland. Depending on the terms of your current policy, your provider may charge a fee for cancelling your policy before its expiration, while others don’t. Review your policy and talk to your provider to prepare for potential penalties.
What companies offer high-risk home insurance in Newfoundland?
Most insurance companies in Newfoundland offer high-risk home insurance. However, the rates that they’ll present will vary depending on their assessed risk of insuring your property in your area, as well as the factors that make you “high-risk”.
High-risk home insurance can be much more expensive than a standard policy, so compare rates through MyChoice to find affordable coverage for your home.
What is a home insurance peril?
A home insurance peril is a risk or event that may cause damage or loss to your home, covered by your home insurance policy. Examples of perils typically covered by standard home insurance policies in Newfoundland are:
– Hail and ice damage
– Fire and smoke
– Damage from lightning strikes
Do I need home insurance before closing in Newfoundland?
You need home insurance before closing in Newfoundland if your mortgage lender requires it. Lenders require you to get home insurance because they have a stake in your property as well.
What factors aren’t used to calculate Newfoundland home insurance rates?
Factors that aren’t used to calculate Newfoundland home insurance rates include:
– Marital status
– Political affiliation
– Sexual orientation and gender
How is home insurance regulated in Newfoundland?
Home insurance in Newfoundland is regulated by Digital Government and Service NL (DGSNL). It’s responsible for regulating all insurance related-matters, including dispute mediation.