Car Insurance

How much is car insurance for a new driver in Ontario?

Unfortunately, Ontario has been ranked as one of the most expensive prices in the country when it comes to the price of auto insurance. This is true for all drivers, but younger people will feel this the most.

Insurance rates will always differ depending on each individual’s situation, demographics and other factors, so it’s hard to pinpoint an exact cost. However, it’s been said that the majority of premiums in Ontario will fall somewhere between $3,275 to $5,198 for young females and $3,751 to $7,280 for young males.

Why is car insurance so expensive for young and new drivers?

There are a few reasons why auto premiums are so expensive for younger or recently-licenced drivers. The biggest and most prominent reason simply has to do with risk. When you are just a beginner at driving, you have less experience and knowledge of the road than someone who has been driving for years. This simple fact alone increases the risk of you being involved in an accident. This increases the price of your premium.

Teenagers are more likely to be involved in car accidents, and have a higher percentage of injuries related to driving incidents. According to MADD, the major factors for the high amount of teenage-related car accidents are due to things such as lack of experience, driving under the influence and impulsiveness.

It is also shown through statistic research that young adults are less likely to wear seatbelts while driving, more likely to drive recklessly and with more aggressiveness, and are most likely to use cell phones while behind the wheel. This is especially true for young men, hence their premiums may be higher than females.

What other factors contribute to the price of auto insurance for new and young drivers?

Just like any other driver in Ontario, a long list of factors are considered and evaluated when determining a premium rate. Other than risk, here are a few important factors used to calculate the cost of your car insurance.

Type of Car You Drive

Your insurance price can differ depending on what make and model of car you drive. Insurance companies will take all of the following into consideration: the cost of maintenance of your specific make/model, the replacement costs of your vehicle and the probability of your car to be stolen.

Frequency of Use

Your premium will be affected depending on how often you actually drive your car. For example, someone who drives to and from work every day will pay more than a driver who uses transit to commute and only drives on weekends.

Where You Live

The area where you drive your car will also affect the price of your premium. People who often drive in areas that are more congested or prone to accidents, such as larger cities, will generally pay higher rates.

Your Driving History

Your driving history is a very important factor insurance companies take into consideration. If you are getting your own insurance, or if you’re being added to your parent’s, your history will be thoroughly checked. This will include any traffic violations, citations or car accidents.

How can a new/young driver save money on car insurance?

There are two main ways that you can save money on your auto insurance premiums. They have to do with selecting the right car and taking advantage of discounts.

The Right Car

As a new driver, you most likely will have to purchase or lease yourself a vehicle. It is important for you to know what types of cars are more expensive to insure, versus less expensive, when making a selection. Cars that are more likely to be stolen, or cars that have parts that aren’t easily accessible will cost you more to insure. On the opposite side of the spectrum, there are more family oriented vehicles such as sedans or minivans. Cars with extra safety features including anti-theft devices and rear-view cameras will also be on the cheaper side to insure.

Discounts

There are multiple discounts available for drivers in Ontario, especially those who are newly-licenced or still in school. Here are some that you should consider talking to your broker about.

  1. Driver training discount: Anyone who has recently completed driving school or a training course is eligible for discounts on their premium.
  2. Multi--vehicle discount: If you have multiple vehicles under one policy, the overall cost will be discounted. See if you can bundle your insurance with either your parents, siblings or spouse.
  3. Good student discount: Any student who is enrolled in either high school or post-secondary, and maintains an average of at least 80 per cent is eligible for discounts on their car insurance.
  4. Good driving discount: This discount won’t be available to you right away unfortunately, but will become an option after you have some more driving experience. If you have a clean driving record for a minimum of three years in a row, you could get a discount.

What level of driver needs their own insurance policy?

Simply put, anyone who owns or leases their own car in Ontario needs a car insurance policy, whether you have a G2 or G level licence. G1 licence holders aren’t allowed to drive on their own, and therefore don’t need their own policy. If you have any level of license, and drive your parents or sibling’s car frequently, it is important to be added to their policy as a secondary driver.

What is a secondary driver?

A secondary driver, which is also sometimes called an occasional driver, is a person who regularly uses your vehicle, but doesn’t drive it the most often. The majority of secondary drivers can be described as someone who uses a car once or twice a week, or who drives it less than 50 per cent of the time.

Your policy states that anyone who uses your vehicle at this frequency will need to be added to your insurance. Examples of secondary drivers include your spouse, your siblings or your children. You do not need to add neighbours who very rarely borrow your car, relatives who use the vehicle when visiting from out of town, or a friend who uses your car while theirs is in the shop for the day.

How much does it cost to add a secondary driver to your policy?

As secondary driver insurance isn’t its own individual policy, but rather an added expense to your already existing policy, it doesn’t cost as much as a normal premium rate. The range can differ between a few dollars to a few hundred dollars each month. Once again, this depends on if the driver added is considered high-risk or not. If the driver is young and/or inexperienced, you most likely will be paying a cost closer to the higher end of the spectrum.

Insurance for new and young drivers in Ontario doesn’t have to be expensive. Lean on us to help you find the best options available.

Have more questions about new/young drivers and their insurance coverage? Get in touch with one of our licensed insurance professionals 7 days a week.