It’s no secret that insurance doesn’t come cheap for younger drivers. In fact, it seems now more than ever, younger drivers, particularly men, are being hit with staggering insurance premiums. So, just how much should a young driver expect to pay? Why do they pay so much? And how can younger drivers lower their premiums? Let’s take a look.
Higher Auto Premiums For Young Male Drivers
In this day and age, a 20-year-old new driver in Ontario can end up paying around $4,000 more annually for car insurance than a 35-year-old who has just obtained their licence, a new report from Rates.ca Finds. What’s more, say that a 20-year-old driver is in Toronto, driving a recently released Honda Civic. If he has no claims history and also no driver training, he might pay up to $13,418 a year.
On the other hand, a female driver with a similar profile, age, and experience can expect to pay around $9,607. This is the case even if they have the same car type. But a 35-year-old new male driver could pay about $7,612 a year. Overall, this is almost $4,000 less than a 20-year-old with the same amount of experience.
So, how exactly are these premiums calculated? Well, estimated premiums for a 20-year-old male driver are based on the three lowest average quotes for a Toronto resident driving a 2024 Honda Civic, according to Rates.ca. The driver is claims-free, conviction-free, and averages 10,000 kilometres annually. To add to this, they carry an optional collision and comprehensive coverage package that has a $1,000 deductible.
Do New Drivers Present A Higher Statistical Risk?
According to Daniel Ivans, a broker and Rates.ca insurance expert, younger drivers typically present a higher statistical risk for insurers.
“Age and experience are significant factors in determining premiums, and gender can also influence risk assessments. Data shows that younger male drivers are more likely to engage in behaviours such as speeding or aggressive driving. This leads to higher insurance costs. That’s why a 20-year-old new driver may face substantially higher premiums compared to a new driver who is in their 30s or 40s.”
According to the report, gender, age and experience all contribute to these cost gaps. However, it also notes that young men face the steepest costs due to stats showing they’re more likely to have driving infractions. Around 1.3% of men under the age of 25 report having major or serious driving tickets. This is compared to 0.35% of male drivers over 60, indicating younger drivers are 73% more likely to receive severe infractions.
How Can a New Driver Mitigate These Premiums?
Fortunately, there are steps young drivers can take to mitigate higher premiums. The same study above finds drivers who complete a beginner driver education course that’s approved by Ontario’s Ministry of Transportation may be able to shave off around $2,000 from their premiums. Of course, this will likely vary by driver.
“Even though younger drivers start with higher premiums because of their risk profile, they still have a lot of influence over how much they pay,” Ivans says. “Completing an approved driver education course, gaining experience, and participating in usage-based programs that demonstrate clean driving habits all help lower costs. For new drivers, those savings can add up to thousands of dollars a year.”
Ways to Save Money on Your Auto Insurance Premiums
As mentioned above, there are a plethora of ways a young driver can lower their premiums. Some other options include:
- Review Your Coverage: Does your vehicle still need comprehensive coverage? By removing unnecessary add-ons, you can lower your bill without making any major sacrifices.
- Raise Your Deductible: Increasing your deductible is one of the quickest methods of reducing your monthly or annual insurance premiums. Your deductible is the amount you agree to pay out-of-pocket in the event of a claim.
- Enroll in a Telematics Program: Many insurance companies offer a telematics program. These track your driving habits through a mobile app or a plug-in device. They monitor habits such as speed, braking habits and mileage.
- Reduce Your Mileage: How your vehicle is classified can impact your premium. For example, cars used for either commuting, business or rideshare services will typically cost more to insure.
- Inquire About Auto Insurance Discounts: Contact your insurance representative and inquire about any discounts you may be missing. You may be surprised by what kind of discounts you may come across!
Check out our article for a more comprehensive and detailed list of ways to lower your auto insurance premiums. Remember, staying safe on the road is one of the best methods when it comes to lowering your auto insurance premiums. If you have any questions as a new driver, or an experienced one, don’t hesitate to contact us at isure today.
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