Left Navigation How insurance works How insurance worksInsurance is about spreading the risk. When you buy insurance, your money is put into a "pool" to help the few people who will experience a loss – like a fire or a collision – in that year. The cost, or price, of insurance is referred to as a premium – and it's based on how likely it is that you will collect from the pool by making a claim. Insurers take many factors into account when calculating your premium including your driving record, where you live, and what car you drive. Speak to your insurance representative about ways to reduce your premium – an example is, increasing your deductible, your insurance representative may have other suggestions for your particular case. It should be noted that when you increase your deductible, you are increasing the amount that you agree to pay for your loss. An insurance policy is a contract that only covers events, or losses, that are specifically listed in it. Insurance is meant to help you reduce your risk by helping you cope with the financial consequences of events that are unpredictable, sudden and accidental. It isn't meant to pay for every problem you face – for example, damage to your vehicle from lack of maintenance. You really need auto insuranceDrivers who have been denied coverage are tempted to drive without insurance. Don't! Driving without insurance is a serious offence with harsh penalties including a heavy fine and in some cases, licence suspension. It's as important to drive with insurance as it is to not drive drunk or distracted. What can I do?Speak out. Contact your member of the House of Assembly, Superintendent of Insurance, General Insurance Ombudsman and Public Utilities Board to request that auto insurance reforms be made a priority.Tell us your auto insurance story at NLAuto@ibc.ca. All About Auto InsuranceRegardless of where you live in Canada, auto insurance is required by law. You are not authorized to drive without it. Related ServicesHow Car Insurance Premiums are CalculatedThe make, model and year of your car, the records of people who are insured to drive it and where you live are all considered by insurers when setting rates. You can lower your premium by making informed decisions.Types of Auto Insurance CoverageCollision, specified perils, comprehensive and all perils are among the additional coverages available for your vehicle. In general, these coverages are very similar across the country. Useful LinksInsurance BasicsWithout insurance, driving a car, buying a home or starting a business would be an unaffordable risk.Insurance-Buying TipsInsurance is a significant investment. Before you purchase coverage, getting answers to key questions can help you make informed decisions. Crisis ManagementIf you find yourself in a crisis situation, never admit liability. Facility AssociationFacility Association’s mission is to administer the automobile insurance residual markets, enhance market stability, and guarantee the availability of automobile insurance to those eligible to obtain it.