Becoming a new young driver can come with a price, especially when purchasing car insurance. Insurance providers classify young drivers at a higher risk as they do not have the driving experience and driving history that mature drivers have. For insurance providers, when quoting an insurance premium, it’s all about the potential risk the driver poses to the company. There is a long list of factors that are taken into consideration by car insurance providers that will determine what a young driver’s premium will be.
How Much Is Car Insurance For Young Drivers?
Car insurance for young drivers in Ontario on average is between $3275 and $7280 depending on the individual’s factors and gender.
How To Get Cheap Insurance For Young Drivers?
The best way to get cheap insurance for young drivers is driving the right car and multiple discounts.
What Is The Cheapest Car Insurance Company For Young Drivers?
There is no one car insurance company in particular as there are several insurance providers that will offer young drivers reasonable rates in Ontario.
Factors That Contribute To Young Driver’s Car Insurance
Every driver in Ontario has a long list of factors that contribute to the determination of their auto insurance premiums. This also falls true for young drivers. Some important factors that contribute to the calculation of a young driver’s car insurance include:
One of the largest contributing factors when calculating car insurance for young drivers is the year, make and model of the vehicle they will be driving. Insurance providers take into consideration what the cost factor would be for replacement, repair, or the likelihood of it being stolen. Some vehicles have a much higher risk rate for being stolen.
- Geographic Location of Residence
Another contributing factor insurance providers look at is the area in which you live. Young drivers that live in a heavily populated area tend to pay higher rates due to the fact of road congestion and a higher incidence of automobile accidents. High crime areas are also a factor for insurance providers.
Insurance providers will take into consideration how frequently the young driver is behind the wheel. Someone that uses public transit to commute back and forth to work or school and only drives on weekends will pay a lower insurance premium and the risk of them becoming involved in an automobile accident is lower.
Driving history is a very important factor in determining a young driver’s car insurance premium. Driving history includes any accidents, traffic violations, criminal charges, or citations.
Helpful Hints For A Young Driver To Save On Car Insurance
As previously mentioned, it can be very expensive for a young driver with very little driving experience and driving history to obtain car insurance. However, there are a couple of ways that may help reduce the cost of car insurance for a young driver. These include:
- Driving An Insurance Friendly Car
Aside from the young driver’s driving history, one of the biggest factors that insurance providers take into consideration when quoting car insurance premiums is the year, make and model of the vehicle the young driver will be driving. There are a few vehicles that are insurance friendly, meaning they are cheaper to insure such as a Nissan Micra or a Kia Rio 5-Door.
- Ask Insurance Provider About Available Discounts
Another great way for a young driver to save on car insurance is by asking their insurance provider about available discounts the company has to offer. These discounts can include a driver training discount, good student discount, multi-vehicle discount, and a good driving discount.
Young Driver’s Graduated Licence Program
Ontario law dictates Ontario residents must be 16 years of age and have a valid driver’s licence and applicable car insurance to drive in this province. The government introduced the graduated licence program on April 1, 1994, for new drivers. The program was established to allow new drivers with time to acquire the skills and knowledge they need in order to operate a motorized vehicle safely.
G1 – Level One
The program requires young drivers to enrol in Level One for a class G1 Licence for a period of 12 months that is reduced to 8 months if the driver has successfully completed a driver’s ed course which has been approved. There are several restrictions placed on the new driver. Some of these include:
- Must have a licenced driver in the passenger seat that has a minimum driving experience of 4 years.
- Zero blood alcohol level when driving
- Cannot drive on a highway or roadway with a speed higher than 80 km/h, unless accompanied by a licensed driving instructor.
- Prohibited from driving between the hours of midnight and 5 a.m.
- Permitted to drive a Class G vehicle only
- Must pass a road test to advance to level two – G2
G2 – Level Two
The second stage of the graduated licence program is Level Two – G2 which lasts for a period of 12 months minimum. G2 drivers are granted more privileges but must abide by:
- Maintaining a zero blood alcohol level when driving
- Drive class G vehicles only
- Limit the number of passengers to available seatbelts in the vehicle
- Must pass a comprehensive/road test to qualify for a full G licence
Impact of The Graduated Licensing Program on Insurance Rates
According to the Minister of Finance in 1994, in his opinion, the graduated licence program would reduce young/new driver accident incidents by approximately 10-20 percent. This would lead to a significant reduction in claim costs. A government policy was established for insurance providers to risk rate young/new drivers equally across the board. The policy dictates that level one – G1 drivers are not to be rated, level-two – G2 drivers can be rated. When an insurance provider is determining the young/new drivers driving experience they are only permitted to use a maximum of 1-year driving experience at level one and 1-year driving experience at level 2. Other stipulations placed on insurance providers include a reduction in their insurance rate when they advance from level 1 to level 2 by 10%, providing the driver maintains a clean driving record and is accident-free for a period of one year. Achieving the full G licence should grant the driver an additional year of 10% rate reduction.