HALIFAX, June 2, 2016 /CNW/ - 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.
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $49 billion.
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and @IBC_Atlantic or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.
If you require more information, IBC spokespeople are available to discuss the details in this media release.
SOURCE Insurance Bureau of Canada
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