Can I Drive My Parents' Car Without Insurance in Ontario?

8 minute read Published on Dec 17, 2022 by BrokerLink Communications

Woman driving her car on a road on a late summer afternoon

Wondering whether you can drive your parents’ car without insurance in Ontario? By the end of this post, you will have a better understanding of the rules around driving another person’s car in Ontario and how BrokerLink can help you find the right car insurance policy.

Driving someone else’s car in Ontario

To begin, we are going to explain the general rules surrounding driving someone else’s car in Ontario. First, there is no rule in Ontario that prevents a policyholder from letting someone else drive their vehicle every once in a while. As long as the car owner has given permission, you are not listed as an excluded driver on their policy, and you hold a valid driver’s licence, you should be covered if an incident occurs and need to file a claim.

Borrowing someone else’s car as a G1 or G2 driver

Remember that Ontario has a graduate licencing system, and drivers at the G1 and G2 levels of this system face many restrictions. Therefore, if you loan your vehicle to a G1 or G2 driver and they break a rule while driving it, your coverage could be at risk. For example, G1 drivers are prohibited from driving on 400-series highways, driving between midnight and 5:00 am, and driving with a blood-alcohol level above 0, among other rules. Beyond the impact on the driver for violation of these licence restrictions, if their reckless behaviour caused an accident while driving your car, your insurance claim would likely be denied.

Are new drivers covered by their parents’ auto insurance policies?

When a child receives their G1 driver’s licence, it is a smart idea for them to be added to their parents’ car insurance policy. However, this isn’t automatic. Your parents will need to notify your insurer that an additional person will be driving their vehicle.

It is worth noting that since G1 drivers aren’t legally allowed to drive on their own (they can only drive with a fully licenced driver in the car), your parents’ auto insurance rate won’t increase until you become a G2 driver and begin to drive the vehicle independently.

Occasional vs. secondary drivers in Ontario

As mentioned above, the owner of a vehicle has the right to let someone else borrow their car from time to time. An insurance company won’t take issue with a third party occasionally borrowing your vehicle. However, if you let someone borrow your car on a regular basis, the situation changes. As a parent, if you have a child that lives in your household, holds a G2 or G licence, and frequently drives your car, you will need to list them as a secondary driver on your insurance policy. When you request to have them added to your policy, the insurance company will review their driving record and may charge an additional premium based on the level of risk associated with covering them (remember that young drivers under the age of 25 tend to face high premiums because of their lack of experience).

Driving your parents’ car in Ontario: whose coverage applies?

It’s important to clarify that when a driver lends their vehicle to another person on an occasional basis or when they add a secondary driver to their policy, the vehicle’s insurance follows the vehicle. This means that the person borrowing the car is protected by the car owner’s coverage. As with any accident, the specific details, such as who was at fault and what the damage was, determine whether the car owner’s insurance company pays or the insurance provider of the other party involved pays.

Further, certain provinces in Canada, such as Ontario, have no-fault insurance provisions. This means that the policyholder will deal with their own insurance company when seeking compensation for damages. Examples of no-fault insurance coverages in Ontario and how they apply to a situation where someone else has an accident in your car are as follows:

  • Accident benefits coverage: The vehicle owner’s insurance company pays for items covered under accident benefits, such as medical expenses (e.g. prescription medications and rehabilitation), for the driver and occupants of the borrowed car.
  • Direct compensation-property damage coverage: Depending on the circumstances of the collision, the vehicle owner’s insurance provider pays out repair costs for the damaged car, regardless of which driver is at fault.
  • Uninsured automobile coverage: If the incidental driver and the borrowed car are victims of a hit-and-run or get into an accident with an uninsured or underinsured driver, the vehicle owner’s uninsured automobile coverage will help cover the costs.
  • Third party liability coverage: If the driver borrowing your car caused the accident, they could be sued by the victim. In such an instance, the vehicle owner’s insurance company must pay the liability costs (defence costs, court fees, settlement costs, etc.). Otherwise, the other party’s insurance pays.
  • Collision coverage: An optional type of coverage in Ontario, collision coverage comes into play if the accident claim does not occur through the direct compensation - property damage portion of your policy. In such an instance, the vehicle owner’s insurer pays the repair costs. These costs are subject to the coverage limits established in the vehicle owner’s auto insurance policy.

Should I stay on my parents’ car insurance policy while driving my parents’ car?

If your parents added you to their car insurance policy as a secondary driver, then you may be wondering how long you should stay on it. The reality is that auto insurance for new drivers under the age of 25 is expensive. This is because young drivers have a limited driving history, which makes them a riskier investment for insurance providers. In addition, young drivers might statistically be more likely to get into accidents than older drivers.

Therefore, we recommend staying on your parents’ car insurance policy if you are a new driver because it is often cheaper than purchasing your own independent policy. There is no age limit or time restriction on how long you can remain on your parents’ car insurance policy. If you maintain a good driving record, you can remain on your parent’s car insurance policy for as long as you drive their vehicle and live at home. In fact, many insurance companies even allow children to stay on their parents’ car insurance policies after they move away for school. For example, if you’re a university student who occasionally comes home and drives the family car, you may still be covered by your parents’ insurance, either on an occasional or secondary basis.

Ultimately, there are no set rules on how long a child can remain on their parents’ car insurance policy. Only once you move away permanently or have gained enough experience to prove to an insurance company that you are a responsible, safe driver - whichever comes first - then it might be worthwhile to buy your own policy.

Can I stay on my parents’ car insurance policy when I move out of the house?

In some cases, you may be able to remain on your parents’ car insurance policy even after you move out of the house. That said, your parents should notify their insurance provider of any changes in drivers or addresses. Also, if you move somewhere else, such as to a new city for school, it might not make sense to have you listed as a secondary driver if you drive their vehicle far less frequently. In such an instance, it might make sense for you to be downgraded from a secondary driver to an occasional driver.

How car insurance companies calculate insurance premiums for drivers

If you decide to purchase a car insurance policy of your own, whether you are able to remain on your parents’ car insurance policy or not, it’s important to understand how insurers determine rates. Many factors come into play when calculating insurance premiums. One such factor is age. Young drivers tend to face higher premiums than older drivers due to a lack of experience on the road. A list of factors that typically influence auto insurance premiums in Canada are as follows:

  • Location
  • Age
  • Driving record
  • Driving experience
  • Past claims
  • Annual mileage
  • Prior insurance coverage
  • Your deductible
  • Local laws
  • How you use your vehicle
  • Marital status

The benefits of buying car insurance through an insurance broker

Do you want to save time and money when shopping for car insurance? Work with a broker! Whether you want to purchase a new car insurance policy or find out if you can be added to your parents’ policy, a broker can help. Keep reading to discover three benefits of working with an insurance broker:

Brokers operate independently of insurance companies

First, insurance brokers work independently of insurance companies. This allows us to put our customer’s needs first - always. We will make you our top priority, taking the time to listen to your unique needs and answer your questions, so that we can find you the right coverage.

Brokers do the work for you

The second benefit of working with a BrokerLink insurance broker is that they do the work for you. From the moment you get in touch, your dedicated BrokerLink insurance advisor will be committed to finding you a great policy for your vehicle. They will ask you questions about your needs and driving habits before shopping around on your behalf and comparing policies to find you a great rate.

Brokers have car insurance expertise

One last reason to work with a licenced BrokerLink insurance broker is the expertise they bring to the table. BrokerLink insurance advisors are fully licenced with years of experience helping drivers just like you find quality auto insurance policies. Take advantage of our invaluable expertise and resources by getting in touch today. We are always happy to answer questions and explain coverage options.

How to purchase auto insurance from a BrokerLink insurance broker

If you are interested in purchasing car insurance from an insurance broker, follow the steps below:

1. Contact an insurance broker

The first step to finding the best coverage for your car at a competitive rate is to contact an insurance broker near you, like BrokerLink. BrokerLink is a full-service insurance brokerage that is available to take your calls, answer your emails, or chat in person at any one of our locations across Canada.

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2. We shop around for policies on your behalf

The second step is to let us handle everything. After taking the time to understand your needs, we will contact top insurance companies to obtain quotes, unlock discounts, and find a policy that meets your needs.

3. You get a great rate on your car insurance policy

The last step is the most fun. Your BrokerLink insurance advisor will present you with multiple policy options, and all you have to do is choose the one that suits you best. It couldn’t be easier!

Contact BrokerLink to learn more about driving your parents’ car without insurance in Ontario

Still have questions about driving your parents’ without insurance in Ontario? Since 1991, we have been helping Ontario drivers find quality car insurance policies. As experts, we can answer any questions you may have, including those that relate to insurance coverage restrictions for secondary and occasional drivers.

Get in touch today by giving us a call, sending us an email, or visiting us in person at one of our many locations throughout Ontario. And if you decide that finding a car insurance policy independent of your parents is the way to go, we can also help you with that. Your dedicated BrokerLink insurance advisor will contact Canada’s top insurance companies, obtain and compare quotes on your behalf, and unlock discounts to find you a great policy at an affordable rate. We can also provide you with an accurate, competitive, and completely complimentary auto insurance quote in minutes. Simply click on our online quote tool to get started.

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