When an insurance company has no coverage history for a driver, premiums tend to be higher, since the insurer has no method other than demographics to identify the chances a driver may have for getting into an accident or making a claim. This is most common with new drivers, but it may also be the case for those moving to Canada from another country or even experienced drivers who have never owned a car before. Each scenario has different opportunities for finding affordable car insurance coverage.
The New Driver
Generally, new drivers with learners’ permits are covered at no cost, once the policyholder notifies the insurance company. However, when the driver obtains a permanent license or reaches the next level of a graduated license system, their use of the vehicle will result in higher premiums. Young drivers are typically at greater risk of the accident through their inexperience, and so premiums are often much higher than adult drivers. Several factors that may reduce the additional costs of new drivers include:
- Completion of a provincially certified driver’s education program
- Honours students may qualify for a further discount from some insurers
- Restrict the new driver to use of an older vehicle with high deductibles and low collision and comprehensive coverage, if possible
- Inform the insurance company if the new driver is away from home, at school for instance, as they will not have daily access to the vehicle.
The New Canadian
When you first come to Canada, insurers may have no access to your driving and insurance coverage history. While it’s not guaranteed to help, you may be able to get credit with your insurer by providing a driver’s abstract and a letter from the insurer from your country of origin. This may enable the insurance company to class you as a more experienced driver, reducing car insurance premiums.
The First-Time Car Owner
Being licensed and claim-free for five years or more is generally regarded as the best place to be in terms of affordable insurance. A young driver who has been listed on a parent’s policy has that time credited toward her claim history. Say, for example, she obtained her G2 license in Ontario at the age of 17 and her father listed her as an occasional driver on the family car. At age 22, she purchases her own vehicle and insurance, with five years of claims-free driving history and no traffic violations. Her insurance premiums will likely be lower than another 22-year old who was not listed on parents’ policies.
In the Canadian market, each insurance company has its own way of calculating premiums, with a unique blend of statistics, demographics and personal information. The qualifications to insure vary between companies, as do the premiums you pay. Check with a number of insurers to get a range of quotes.
Your best approach is the rate calculator here, on the QuoteFinder page. By entering basic data, you can search over 30 insurers to find who provides the best price for your situation. Quotes are free, and you’re not obligated to use any. It’s an information tool to point you in the best direction in a competitive insurance market.