One of the true milestones on the road to becoming an adult is driving. Having a young, new driver in the family can be nerve-racking, and protecting them while on the road is your number one priority. However, navigating car insurance for young drivers can be confusing.
Knowing what coverage you need, how much coverage is sufficient and how to find the best rate is a lot to process. At isure, we work with drivers of all ages to help them navigate the insurance market. So, let’s talk about what car insurance you need as a young driver and what you can expect.
Car insurance for young drivers: what you need to know
At what age is car insurance the cheapest?
Assuming you have a good driving history, rates typically decrease once a driver turns 25.
What is the cheapest car insurance for young drivers?
The cheapest options for young drivers are to:
- Be listed as an occasional driver on a parent or guardian’s policy
- Maintain a clean driving record
Can a G1 driver be insured in Ontario?
A G1 driver is typically covered under a supervising driver’s insurance and does not need their own policy.
How to save on car insurance for young drivers in Ontario?
A car insurance policy for a 16-year-old driver typically ranges from $3,000 to $8,000 per year, depending on various risk factors.
What is the age for driving in Ontario?
Residents of Ontario must be at least 16 years old and have a valid Ontario driver’s licence to drive in this province. Visitors to Ontario who want to drive while here must be at least 16 years old and have a valid driver’s licence from their own province, state or country. To apply for a G1 licence, you must be at least 16 years old and pass an eye and written test about the rules of the road and traffic signs.
What is car insurance for young drivers in Ontario?
In Ontario, car insurance is mandatory for all drivers. Essentially, it provides financial protection for you and others in the event of an accident. If you get into an accident, the cost of repairs or injuries can be high, and if you get sued, it can be even higher. As such, car insurance helps to cut the financial impact of a mistake.
What is the cost of car insurance for young drivers?
The first thing that you will notice about car insurance for young drivers is the cost. It’s going to be expensive at first. Young drivers are statistically more likely to be in a car accident due to their inexperience, and as such, the rates are higher. According to the Insurance Institute for Highway Safety (IIHS), “Teen drivers have crash rates nearly four times those of drivers 20 and older per mile driven.” Which is why young drivers cost more to insure.
Ontario is the second most expensive province for car insurance for young drivers. A breakdown of auto insurance in Ontario is as follows:
- The average auto insurance policy for drivers in Ontario is around $1,900/year
- Drivers 16-19 years old pay the most for auto insurance, within a range of $3000-$8000 annually
Age Group | Average Annual Cost |
16-19 | $3,000-$8,000 |
20-24 | $2,000-$4,500 |
25+ | $1,500-$2,500 |
Car insurance for young drivers is significantly more expensive than for drivers aged 25 and over. Young drivers can pay up to five times the average rate. This is hundreds, or even thousands, more in annual premiums. But there are dozens of factors insurers consider. Several variables go into calculating car insurance quotes for new drivers. Here are a few factors taken into consideration when calculating your teen’s premium:
- Their driving record
- How frequently they use the car
- Location
- Age
- Gender
- Type of car
- Credit history
- Type of coverage you need
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When should you add a young driver to your car insurance in Ontario?
You need not add your child to your car insurance policy in Canada until they are licensed to drive and driving on their own. Most Canadian insurance companies do not require you to include a teen who is still using a G1 and can only drive with an adult in the car for learning purposes.
They will have coverage through your policy should something happen. In a car insurance policy, the “primary driver” or “principal driver” is the person who drives the vehicle most often, regardless of who actually owns it. Other drivers living in the same household will need to be listed in the policy, too, but the person who drives the vehicle most often should be listed as the primary driver for that vehicle.
Adding an occasional driver
Once your child has completed a graduated licensing program and can drive without supervision, you will then need to add them as an occasional driver to your car insurance policy. A secondary, or occasional, driver is someone who uses a vehicle often but not most of the time.
These drivers also need to be on your insurance policy for that vehicle, and your insurer will charge an additional premium for that driver. This happens because the risk of an accident increases when more than one person uses the vehicle. Occasional drivers will also be named drivers on the policy. Typically, this means they drive your vehicle once per week or less than 50% of the time.
A distracted driving infraction can cost you any conviction-free discounts you may have and increase your insurance by up to 18%. So, before you add your child as an occasional driver, make sure they understand the consequences of their actions.
How to save on car insurance for young drivers in Ontario
As a young driver, there aren’t many discounts that you can access. That said, there are a few that you can take advantage of to save money. Besides being listed as an occasional driver, here are some other ways to save on car insurance:
- Bundle policies: If you live at home, add your car insurance to your parents’ policy. There is always a slight discount for each extra policy you add to an account.
- Complete driver’s education: If you complete a driver’s education course, many insurance companies will provide you with a discount.
- Get your G licence ASAP: At each level of the licensing system, you get a discount as a driver. G2 insurance rates are higher than those for a full G licence.
- Get good grades: If you’re a post-secondary student, some insurance companies offer a discount if you maintain a 3.5 GPA or better.
- Engage in telematics insurance: This innovative program rewards safe driving with reduced premiums based on real-time monitoring of your vehicle.
Some parents might be tempted to list themselves as the primary driver of their teen’s car to keep their premiums down, but you should know that this is considered insurance fraud — and it can result in a cancelled policy or a denied claim.
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Being safe as a young driver
At the end of the day, building a foundation of safe driving is the single best long-term strategy for lowering car insurance premiums for young drivers in Ontario. While navigating high teen rates, graduated licensing rules, and occasional driver statuses can feel overwhelming, you don’t have to figure it out alone.
With isure, you and your family will always be in good hands because we take care of our clients as we would our own families. We understand insurance needs differ from client to client, so rest assured that your teen is protected. Get a personalized car insurance quote for young drivers in Ontario today and see how much you can save.
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