The Ultimate Guide to Car Insurance in New Brunswick

By Arthur Dubois | Published on 24 Jul 2023

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    In New Brunswick, car insurance is mandatory. It provides protection and peace of mind in an accident. However, understanding car insurance can be overwhelming with the different types of coverage options and policy terms. In this ultimate guide, we will break down everything you need to know about car insurance in New Brunswick, from the basics to making a claim and money-saving tips.

    Understanding Car Insurance in New Brunswick

    Car insurance is a contract between you and an insurance provider that protects you financially in case of damage or injury from a car accident. It aims to put you back into the same financial position you were in before the unexpected happened. But how exactly does car insurance in New Brunswick work? Let’s take a closer look.

    The Basics of Car Insurance

    Car insurance in New Brunswick typically consists of several types of coverage that work together to ensure you have adequate protection from financial loss. Coverage options include:

    • Third-Party Liability Coverage: A minimum of $200,000 Third-Party Liability coverage helps protect you financially if you’re at fault in an accident and cause damage to someone else’s property or injure another person.
    • Accident Benefits: Accident benefits provide compensation for medical expenses, rehabilitation, and income replacement if you, your passengers or pedestrians are injured in an accident, regardless of who is at fault.
    • Uninsured Motorist Coverage: This coverage comes into play if you are involved in an accident with an uninsured or hit-and-run driver, providing compensation for damages and injuries.
    • Collision and Upset Coverage: Collision coverage helps pay for repairs or replacement of your vehicle if it is damaged in a collision with another car, object or the ground.
    • Comprehensive Coverage: Comprehensive coverage protects your vehicle against non-collision incidents such as theft, vandalism, fire, or damage caused by severe weather.
    • Specified Perils Coverage: Covers damage to your vehicle or loss of your car due to specific perils named in the policy. 
    • All Perils: Combines comprehensive and collision insurance.
    • Underinsured Motorist: Provides coverage if the other driver doesn’t have enough insurance to cover your claim.

    Understanding the different types of coverage is essential when selecting a car insurance policy that suits your needs. It’s important to carefully review the terms and conditions of each coverage option to ensure you have the right level of protection.

    Why Car Insurance is Mandatory in New Brunswick

    New Brunswick’s Insurance Act requires all drivers to have a minimum of car insurance coverage. This requirement protects drivers, passengers, and pedestrians in an accident. Driving without insurance can result in severe penalties, including fines, license suspension, and even imprisonment. Understanding the consequences of not having car insurance in New Brunswick is crucial.

    By making car insurance mandatory, the government aims to ensure that every driver on the road has the financial means to cover the costs associated with accidents. Ensuring all drivers have insurance helps protect innocent victims from being left with significant expenses or unable to receive proper compensation for their injuries.

    Additionally, car insurance gives drivers a sense of security and peace of mind. Knowing that you are protected financially in case of an accident can relieve some of the stress and worry that comes with being on the road.

    However, the minimum required coverage may only partially protect you in some situations. It’s a good idea to consider additional coverage options or higher limits to protect you. Consulting with an insurance professional can help you navigate the complexities of car insurance and make informed decisions about your coverage.

    Types of Car Insurance Coverage in New Brunswick

    Car insurance in New Brunswick provides financial protection in case of accidents, damages, or injuries. Some insurance is mandatory, and other types of insurance are optional. Understanding the different types of car insurance coverage available can help you make informed decisions about the level of protection you need.

    Mandatory Car Insurance in New Brunswick

    At the very least, New Brunswick drivers must have a basic policy that includes third-party liability insurance, accident benefits, property damage, Direct Compensation-Property Damage (DCPD), and uninsured motorist coverage.

    Third-Party Liability Coverage

    Third-party Liability coverage of $200,000 is mandatory in New Brunswick. If you are at fault in an accident,  third-party liability covers the costs of injuries or damages to others. Coverage includes medical expenses, property damage, and legal fees.  Liability coverage financially protects you in case of an unfortunate event.

    Imagine driving down a busy street in downtown Fredericton and accidentally rear-ending the car in front of you. Without liability coverage, you would be responsible for paying for the damages to the other vehicle, any medical expenses incurred by the occupants, and even potential legal fees if the injured party files a lawsuit against you. However, with liability coverage, your insurance company will handle these costs, saving you from potential financial hardship.

    Accident Benefits

    Accident benefits cover you, your passengers, pedestrians, and anyone else who may have been involved in the accident. It covers medical benefits, income replacement, and other benefits for injuries related to the accident. It also covers funeral expenses and provides compensation if you’re killed in an accident. Accident benefits are no-fault, meaning the policy provides insurance regardless of who caused the accident. 

    Property Damage

    Property damage insurance doesn’t cover vehicle damage. Instead, it covers damage to property. Suppose you lose control of your car and end up on someone’s lawn, ruining their landscaping. Property damage covers these types of accidents.

    Direct Compensation Property Damage (DCPD)

    DCPD will cover damage to your vehicle and the contents of your car from an accident as long as you are not at fault and the other driver has a policy with DCPD. You submit your claim through your insurer instead of the other person’s insurance company. Using your own insurance company results in a faster claims process for you.

    Uninsured and Unidentified Motorist Coverage

    Uninsured motorist coverage is an important type of car insurance that protects you if you are involved in an accident with a driver without insurance to cover the damages. It covers medical expenses and property damage that the at-fault driver’s insurance should have covered.

    You could be driving on a rural road in New Brunswick when another driver runs a stop sign and hits your vehicle. After exchanging information, you discover that the at-fault driver has no insurance. Without uninsured motorist coverage, you would be left to bear the financial burden of medical expenses and repairing your damaged vehicle. However, with uninsured motorist coverage, your insurance company will step in to cover these costs so you’re not left in a difficult situation due to someone else’s negligence.

    Uninsured motorist coverage provides an added layer of protection, especially when the other driver is not adequately insured. Similarly, unidentified motorist coverage provides insurance for damages caused by an unknown driver, such as in the case of a hit-and-run.

    Optional Coverage

    Some drivers only want the minimum insurance to keep them on the road. For others, more than the minimum is needed. You may want more coverage for your vehicle so you don’t have to pay for your car’s damages out-of-pocket.

    Collision Coverage

    Collision coverage is another essential type of car insurance in New Brunswick. It helps pay for repairs to your vehicle if you are involved in an accident, regardless of who is at fault. This coverage is particularly beneficial when the repair cost exceeds your vehicle’s value.

    Suppose you’re driving on a snowy winter day in Moncton, and another driver loses control of their vehicle and collides with your car. The impact causes significant damage to your vehicle, making it inoperable. Without collision coverage, you would have to bear the total cost of repairs or, in some cases, replace your car entirely. However, with collision coverage, your insurance company will assist in covering these expenses minus your deductible so that you can get back on the road as soon as possible.

    Comprehensive Coverage

    Comprehensive coverage protects against damage to your vehicle not caused by a collision. It covers theft, vandalism, fire, and weather-related events like hail or flooding. It also covers damage from riots, civil commotions, missiles, and other perils. This type of coverage is valuable in areas prone to extreme weather conditions or high vehicle theft rates.

    For example, you could wake up one morning in Saint John and find your car missing from where you parked it the night before. Without comprehensive coverage, you would be responsible for the entire cost of replacing your stolen vehicle. However, comprehensive insurance covers theft as a peril, so you will have coverage if your car is stolen so you’ll be able to replace your vehicle.

    Specified Perils

    If you have specified perils, your car will have insurance coverage for many of the same things that comprehensive coverage offers. You’ll also have coverage if your vehicle is damaged or lost in transport due to sinking, derailment, burning or collision. Damage or loss from the falling or forced landing of an aircraft or its parts is also part of a specified perils policy.

    All Perils

    All perils insurance combines collision or upset insurance and specified perils. All Perils provides the most extensive insurance coverage for your vehicle. It will increase the cost of your policy, but for some drivers, the price is worth paying for the coverage it offers.

    How to Choose the Right Car Insurance Policy

    Choosing the right car insurance policy is an important decision that can significantly impact your financial well-being. With so many options available, navigating the various policies and coverage options can be overwhelming. However, by following a few key steps, you can make an informed decision that meets your needs and provides peace of mind.

    Assessing Your Needs

    Before you start shopping for car insurance, take some time to evaluate your needs. Consider factors such as your driving habits, the value of your vehicle, and your budget. Are you a daily commuter or an occasional driver? Do you have a brand-new car or an older vehicle? These factors will help you determine the types and amounts of coverage you require.

    For example, consider comprehensive coverage to protect against theft or damage if you have a brand-new car. On the other hand, if you have an older vehicle with a lower value, you may opt for a basic insurance policy so you’ll have liability coverage to meet the minimum legal requirements.

    Additionally, consider your budget and how much you can afford to spend on car insurance premiums. While it’s important to have adequate coverage, you want to keep your finances manageable. Finding the right balance is key.

    Comparing Car Insurance Providers

    Once you have a clear understanding of your needs, it’s essential to compare multiple car insurance providers to make sure you’re getting the best coverage at the best price. With so many companies, it can be tempting to go with the first one you come across. However, taking the time to research and compare car insurance quotes can save you money and provide you with better coverage.

    Understanding Policy Terms and Conditions

    When selecting a policy, carefully read and understand the terms and conditions. Don’t just skim through the document – take the time to read it thoroughly. Pay attention to coverage limits, deductibles, exclusions, and any additional benefits or features provided.

    For example, some policies may offer additional benefits such as roadside assistance or rental car reimbursement. While these features may cost extra, they can be valuable in certain situations. Consider your needs and assess whether these additional benefits are worth the investment.

    Ask your insurance agent for clarification if you encounter any unclear terms or conditions. It’s essential to clearly understand what is covered and what is not to avoid any surprises in the event of an accident or claim.

    By carefully assessing your needs, comparing insurance providers, and understanding policy terms and conditions, you can choose the right car insurance policy with the coverage you need and the peace of mind you deserve. Remember, car insurance is not just a legal requirement but also a valuable financial protection that can save you from significant expenses in the event of an accident or damage to your vehicle.

    The Cost of Car Insurance in New Brunswick

    Factors Affecting Car Insurance Rates in New Brunswick

    The cost of car insurance can vary widely. A CBC article found that premiums could range from $1597 to $6898, although the article mentions that the average premium per passenger vehicle is $1064 per insured passenger car. Still, the difference in premiums can be significant, so shopping around for the best rates is essential.

    Several factors influence the cost of car insurance in New Brunswick, including your age, driving record, insurance history, vehicle type, and location. However, it’s illegal in New Brunswick to use a driver’s age, marital status or gender as factors in pricing premiums. Other factors that don’t affect your premium are whether you drive a domestic or foreign car, the colour of your vehicle and parking tickets.  It’s vital to understand how these elements impact your premiums. 

    How Car Insurance Rates Are Calculated in New Brunswick

    Insurance companies monitor statistical data such as the number of claims made over several years and the amounts paid out due to the claims. The data is analyzed by actuaries who use it to predict the number and costs of future claims. Using this information, insurance companies set their rates. 

    They must ensure that the rates will provide enough money to cover claims, operating costs and generate a profit for the business. At the same time, they must ensure rates are fair and reasonable since too high rates will cause them to lose customers. The Manual of Rules and Rates is used by all car insurers when they calculate rates.

    The information and projected rates are submitted annually to the New Brunswick Insurance Board (NBIB) for review. The NBIB may hold a hearing to determine if the rates are reasonable and justified, or they may approve them.

    The annual review means that your insurance rates can increase at renewal. Reviewing your insurance needs and comparison shopping can help you get the best deal on your policy at renewal.

    How to Get Discounts on Car Insurance in New Brunswick

    There are several ways to lower your car insurance premiums in New Brunswick. The first is to choose coverage that is adequate for your needs and fits your budget. Adding insurance types will typically increase the cost of your policy.

    Your driving record affects your premiums as well. If you have had previous insurance claims, you may have higher premiums. Maintaining a good driving record can help reduce your premiums.

    Where you live and how you use your car can affect the cost of your insurance. If you live in a high-crime area or put a lot of mileage on your vehicle, you may pay more than someone who uses their vehicle less or lives in a low-crime area.

    Insuring multiple vehicles or bundling your insurance policies with home, auto insurance and other types of insurance you may need can lower your premiums.

    New drivers can have higher premiums than more experienced drivers. Insurers in New Brunswick offer a First Chance discount on insurance premiums for new drivers who have taken a driver’s training course. Their policies are to give the same pricing as drivers with six years of driving experience. So, taking a driver’s training course can be beneficial for training you to be a better driver and lowering your premiums.

    How to Make a Car Insurance Claim in New Brunswick

    Steps to File a Claim

    If you find yourself in an accident or need to make a car insurance claim in New Brunswick, follow these steps:

    1. Ensure everyone’s safety and call the police if required.
    2. Exchange information with the other driver(s) involved.
    3. Notify your insurance provider as soon as possible.
    4. Gather all necessary documentation, such as accident reports and photographs.
    5. Cooperate with the insurance adjuster during the claims process.

    Dealing with Insurance Adjusters

    Insurance adjusters play a crucial role in settling claims. Be cooperative, provide accurate information, and keep all communication documented. You can escalate the situation if your claim is handled unfairly.

    What to Do If Your Claim is Denied

    If your claim is denied, don’t panic. Review the denial letter carefully and understand the reasons for rejection. You can appeal the decision, seek legal advice, or contact your insurance ombudsperson for assistance.

    Car Insurance in New Brunswick: The Bottom Line

    By understanding the basics of car insurance in New Brunswick, selecting the right policy, and knowing how to navigate the claims process, you can ensure you are adequately protected on the roads. Remember, car insurance is not just a legal requirement; it’s an investment in your financial security. So take the time to explore your options, compare rates, and make informed decisions that suit your needs and budget. Safe travels!

    FAQs About Car Insurance in New Brunswick

    How much is car insurance in New Brunswick?

    The cost of car insurance can vary widely. A CBC article found that premiums could range from $1597 to $6898, although the article mentions that the average premium per passenger vehicle is $1067 per insured passenger car. Still, the difference in premiums can be significant, so shopping around for the best rates is essential.

    How Can I Lower My Car Insurance Premiums in New Brunswick?

    First, assess your needs so you don’t overbuy. Next, you can comparison shop, bundle your policies, and, if you’re a new driver,  take a driver’s training course can lower your premiums. Maintaining a clean driving record will help keep your premiums reasonable as well.

    Can I Drive Without Car Insurance in New Brunswick?

    No, it is illegal to drive without car insurance in New Brunswick. The minimum requirement is a basic insurance policy which provides $200,000 of third-party liability coverage, property damage, accident benefits, Direct Compensation Property Damage and uninsured motorist coverage. Basic insurance protects both yourself and others in case of an accident.

    What Happens If I Get into an Accident and I’m Not Insured?

    You can face severe consequences if you get into an accident and are uninsured. You may be personally responsible for covering all damages and medical expenses. Your driver’s license may also be suspended, and you could face hefty fines or even possible jail time.

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    Arthur Dubois is a personal finance writer at Hardbacon. Since relocating to Canada, he has successfully built his credit score from scratch and begun investing in the stock market. In addition to his work at Hardbacon, Arthur has contributed to Metro newspaper and several other publications