Retail sales tax to be added to insurance on July 1

JUNE 2, 2016 (HALIFAX) – In the recent provincial budget, the Newfoundland and Labrador government introduced a new 15% retail sales tax on home, auto and business insurance policies. Effective July 1, 2016, all new or renewing insurance policies in the province will be subject to this tax. In addition, the existing government tax that is paid on insurance premiums will increase by 1%.

For an explanation of these changes, watch this short video that Insurance Bureau of Canada (IBC) prepared.

"This is a tax and not an increase on insurance premiums," said Amanda Dean, Vice-President, Atlantic, IBC. "Knowing the financial strain this will add to Newfoundlanders and Labradorians, customers are encouraged to talk to their insurance representative about options that might be available such as discounts for combining home and auto coverage, or for having security and safety features."

IBC recommends that customers speak with their insurance representative if they have questions about their individual policies.

Also challenging in Newfoundland and Labrador is that the number of auto insurance claims continues to rise, and claims have been getting more expensive. Between 2004 and 2014, the average increase in claims costs per vehicle was 41% in Newfoundland and Labrador, compared with 20% in New Brunswick, 10% in Nova Scotia and 0% in Prince Edward Island.  

The property and casualty insurance industry looks forward to reviewing the auto insurance product in Newfoundland and Labrador to find ways to rein in costs for drivers in the province.

If you have home, auto or business insurance in Newfoundland and Labrador, you're going to see changes to what you pay, starting on July 1, 2016.