Does age affect car insurance?

Age-related factors are among the most important that determine auto insurance rates in Canada. Car insurance companies rely on statistical risk assessments that indicate that certain age groups present more of a risk on the road than others.

Why age matters in car insurance premiums

The legal driving age in Canada differs between Canadian provinces. There are also age requirements for renting a car. However, the closer you are to this legal driving age and the older you are, the greater the risk you pose. For example, young drivers tend to drive more recklessly, which increases their likelihood of getting into an at-fault collision. Similarly, senior drivers can also experience higher car insurance premiums due to declining vision, reflexes, and other age-related medical conditions.

Understanding how car insurance rates are calculated and how they can change over time can help you make an informed decision about what policies you need and ways to save money on coverage. To learn more about how age factors into premiums, along with other factors, keep reading!

How age affects auto insurance rates

When looking into car insurance costs across provinces like Ontario, Alberta, and others in Canada, you'll notice a clear trend emerging: car insurance rates for those under 25 tend to be more expensive than insurance premiums for those in their 30s to mid-60s. Then, once drivers hit a certain age (typically over 65), auto insurance costs increase once again. Let's look at how different age ranges factor into car insurance rates in more detail below:

Young drivers aged 16-19 years old

Teen drivers face some of the highest car insurance rates, due to the fact that they are considered the riskiest drivers on the road. According to the Insurance Bureau of Canada, drivers between the ages of 16 and 19 years of age pay, on average, five times more than the average car insurance rates for those over 25. The high premiums are due to increased accident rates, which are largely due to inexperience and risky driving behaviours.

For example, the fatal collision rate per 100,000 licensed drivers aged 16 to 19 was 6.5 in 2021, up 5% from 2019 (6.2), as reported by Transport Canada. Contributing factors to these collisions included driving under the influence of drugs and alcohol, speeding, and distracted driving.

Young drivers aged 20-29 years old

Similarly, young drivers between 20-29 years of age still pay higher premiums compared to older age groups. According to the International Transport Forum, young drivers between the ages of 21 and 24 are the most vulnerable to traffic casualties, with 7.2 deaths per 100,000. Transport Canada also reports that while young drivers reflect 13% of licensed drivers on Canadian roads, they account for 20% of motor vehicle deaths and injuries.

However, as drivers age and gain more experience while maintaining a clean driving record, their average car insurance rates begin to decrease throughout their 30s, 40s, and 50s.

Adult drivers aged 30-49 years old

Generally speaking, adult drivers in their 30s and 40s pay the least for auto insurance. As long as they have a driving record with little to no speeding tickets or other traffic tickets, at-fault accidents, and numerous insurance claims, they tend to be considered the most experienced and responsible on the road compared to younger adults.

Adult drivers 50-64 years old

Insurance companies consider middle-aged drivers with solid driving records to also be responsible behind the wheel, which usually translates to lower insurance premiums for the next few decades.

Senior drivers aged 65+ years old

Seniors may notice a slight increase in car insurance rates. This is due to several age factors that can influence one’s driving capabilities. For example, compromised vision or hearing or a slower reaction time could lead to increased accident rates for older drivers. In fact, Statistics Canada reports that elderly drivers' collision rates, particularly those over 75, are greater than and comparable to crash rates of very young drivers between the ages of 16 and 19. Additionally, according to the Government of Quebec, for older drivers over 75, the frequency of insurance claims is approximately 4%, which is comparable to that of those aged 25 to 29.

Note that although some insurance companies may increase premiums for drivers over a specific age, these premiums are unlikely to be anywhere near the cost of premiums for teenage or new drivers. In addition, many insurance providers offer car insurance discounts to seniors, especially those who are retired.

Other factors affecting average car insurance rates in Canada

As mentioned, insurance companies will certainly consider your age when determining your rates, but this won’t be the only factor considered. Understanding these factors can help you save money on your own auto insurance policy:

Driving history

Your driving history is a mix of your driving record and your driving experience. For example, the more time you’ve spent on the road, the better, as driving experience is a major asset. The more experience you have, the lower your rates may be.

However, years of driving experience will need to be coupled with a good driving record if you want to benefit from lower premiums. Insurance companies will consider:

• Accidents: The number of at-fault accidents you have on your file, the riskier you'll be to insure, which will increase your costs for auto insurance.
• Tickets: Speeding, careless driving, DUIs, and other traffic violations will also raise rates.
• Years you've had your driver's license: The longer your driving history is with no claims or violations, the lower your costs will be.

Vehicle type

The type of car you drive will also play a role in determining your auto insurance premium in Canada. An insurance company will ask for details about the make, model, and year of your car to assess its risk. From there, they will do some research into the safety rating, rate of theft, and estimated value.

Typically, luxury and sports cars cost more to insure due to high repair costs and theft rates, while standard cars with high safety ratings tend to lead to more savings.

Where you live

Insurance providers also look at where you live and consider the risks associated with your neighbourhood, such as population density, weather conditions, crime rates, and traffic congestion.

Drivers living in densely populated areas like Downtown Toronto of Vancouver typically pay more for coverage, given that there is a higher rate of traffic, which increases the likelihood of a collision. Crime rates, accident claim rates, and weather-related risks like snow and heavy rainfall also impact rates.

Additionally, where you park your car matters, for example, parking in a garage or carport can lower premiums compared to street parking.

Insurance history

From an insurance company's perspective, your insurance history also plays a critical role in your costs. Specifically, they're looking at your claims frequency, your ability to make your payment schedule every month, and other factors.

Gender

Gender is a second factor that insurance companies may consider when determining your auto insurance premium. According to Statistics Canada, male drivers are statistically more likely to get into a collision than female drivers. According to this statistic, male drivers in Toronto between the ages of 17 and 19 pay 27% more each year than female drivers. Similarly, in Montreal, drivers when looking at between the ages of 25-30, men pay 19% in average rates than women.

Driving habits

The more you drive, the more at risk you are of getting into an accident. Thus, if you spend an above-average amount of time behind the wheel because you have a long commute to work or frequently drive on major highways, your premium may be higher. Conversely, if you do not drive your car very often, your rates could be lower, especially if you qualify as an occasional driver.

Type of car insurance you purchase

Lastly, your premiums can also be influenced by the types of car insurance you purchase. For example, if you choose to purchase additional coverage like comprehensive coverage or collision coverage on top of the mandatory policies in your province, you'll pay more for your car insurance policy, given that you'll have additional protection against risks.

How much do car insurance rates change with age?

Several factors influence car insurance rates in Canada, including location, provincial laws, and driving record, which we discuss in greater detail below. Age is just one of these factors, albeit an important one. All other factors being equal, drivers can expect their car insurance premiums to decrease and change as they age.

Tips for young drivers to lower car insurance costs

Because driving without insurance is illegal in Canada, many young drivers, particularly teenage drivers, face higher premiums than others, making car insurance an expensive and unavoidable expense. However, there are ways teen drivers can save on their coverage:

Pay your car insurance premiums upfront

Most insurance companies in the insurance industry add an administration fee to customers who pay their premiums every month, as it costs them money to process each payment. To avoid this, consider paying for your car insurance upfront.

Take advantage of discounts

Another way to save on car insurance is to ask about discounts. Insurance providers offer savings, including:

• Good student discount: Do you have a good GPA? Most insurers offer student car insurance discounts to those who maintain a 3.0 GPA or higher.
• Driver's education program: Taking a certified driver's education course or defensive driving course can help you save between 10 to 15% on your insurance rates.
• Installation of winter tires: Like in a part of Canada that experiences heavy snowfall? Installing snow tires on your vehicle can help you save up to 15%.

Choose your car insurance coverage wisely

Young adults can save on coverage by being added to their parents' insurance as occasional drivers, allowing them to drive their parents' car without buying their own insurance.

Maintain a clean driving record

Practicing safe driving habits and being a responsible driver is the best way to save on car insurance. While it won't help you change your premiums overnight, in the long run, it will aid you in keeping your costs as low as possible.

Choose a vehicle wisely

Opting for a used car with a high safety rating and low theft rate can significantly lower your insurance costs. Check out our guide to learn more about what to look for before buying a used car.

Maintain a high credit score

Do you have a high credit score? Use this to your advantage, and you could benefit from a cheaper rate. Not all provinces offer credit score car insurance discounts, but some, such as Quebec and Alberta, might. Inquire about credit score auto insurance discounts near you by getting in touch with BrokerLink.

Increase your deductible

Premiums and deductibles go hand in hand, which is why you should pay close attention to the deductible you select for your policy. If you want to keep your car insurance rates low, choose a higher premium. If you don’t mind paying more for car insurance, choose a lower deductible.

Shop around with different car insurance companies

If you live in a province with a private insurance system like Ontario or Alberta, you'll be able to shop around and compare quotes from different providers before choosing one that fits your needs. This way, you can get the best deals available and ensure that you don't sacrifice the amount of coverage you receive.

Research alumni and employment discounts

Many insurance companies offer car insurance discounts to graduates of certain post-secondary institutions and employees of certain companies in Canada. This means that you may qualify for a car insurance discount without even realizing it. When applying for auto insurance, be sure to research if any insurance companies near you will give you a discount simply because of where you attended school or a job you’ve worked at in the past.

Purchase affordable car insurance with BrokerLink

Age is a crucial factor in determining insurance rates, regardless of age. Whether you're a teen driver, young adult, or senior, understanding how these different variables contribute to costs can help you make a more informed decision on your coverage and lower costs.

At BrokerLink, we help customers find affordable car insurance. Our licensed insurance brokers have access to numerous policies from some of Canada's top insurance providers, allowing us to help you shop around, unlock discounts, and save on coverage.

We're also here to answer any questions you may have about insurance, including how you can tell when your policy ends, whether or not you can cancel your policy before your term ends, ways you may be invalidating your car insurance, and more! Contact us today to get a young driver car insurance quote and speak with a broker!

Get an auto insurance quote [phone]