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How much does car insurance cost for a new driver?
Many factors affect a new driver’s premium. Some of the key considerations are:
Driver profile: Demographic factors such as age and gender influence premiums. Drivers under 25 typically pay higher premiums, as insurance company data suggests that lack of experience increases the risk of accidents. Similarly, male drivers have been found to be involved in more road accident deaths, increasing their risk profile. Vehicle type: Insurance companies base your premiums not only on you as a driver, but also on the car you will be driving. They will consider how expensive the car would be to repair if you had an accident, and how likely it is that it will be stolen. Contrary to popular belief, the color of your vehicle does not affect your premium. Where you live: The province you live in, as well as the specific area, can affect what you pay. The cost of new driver insurance can be higher in cities than in rural areas, for example because there are more accidents in densely populated areas. Pricing also varies by province, with some provinces offering public, government-run insurance programs and others operating on a private (or hybrid public-private) model. Driving history: Premiums will be more expensive if you have a history of traffic fines or car accidents.
The amount of coverage you decide to purchase also affects, and minimum coverage amounts vary significantly by province and territory. To give you an idea, in Ontario, a new driver must have third-party liability insurance with a minimum coverage of $200,000, as well as accident, direct property damage, and uninsured auto coverage.
As mentioned above, the cost of insurance depends on many factors, so there is a huge range of premiums across the country. On average, you can expect to pay anywhere from $1,500 to $7,000 per year. It’s worth noting that premiums for new drivers who are older are less expensive than for those under 25. A new driver in their thirties or forties can pay anywhere from $50 to $100 less per month. Keep in mind, though, that even for older drivers, insurance rates depend on factors such as your driving record and place of residence. Since prices can vary significantly between insurers, even within the same region, it’s always a good idea to shop around and compare prices.
How do the premiums differ per province?
The average cost of auto insurance in Canada is $1,142 per year, according to data from the General Insurance Statistical Agency. For example, for auto insurance in British Columbia, drivers pay an average of $1,832 per year, while the average in Quebec is $717, the lowest in the country.
ProvinceAverage Cost of Auto InsuranceAlberta$1,316British Columbia$1,832Manitoba$1,080New Brunswick$867Newfoundland and Labrador$1,168Nova Scotia$891Ontario$1,505Prince Edward Island$816Quebec $717Saskatchewan$1,235
The difference in provincial auto insurance premiums is due to differences in average auto repair costs, the relative frequency of insurance fraud, and the prevalence of injury claims and related lawsuits. The mandatory minimum amount of coverage a driver must have in a particular province matters, as does the existing insurance system.
In BC, Saskatchewan and Manitoba, drivers buy insurance from the government. In Alberta, Ontario and the Atlantic provinces, which use private insurance companies, motorists can shop around and compare providers. Quebec is the only province operating on a hybrid system.
Do I need my own insurance?
If you plan to share a vehicle with another driver (such as a parent, for example) and only drive occasionally, you can purchase secondary driver insurance, also known as occasional driver insurance. Secondary driver insurance is an economical option, because you do not have your own policy. Instead, you are added to the main driver’s policy and pay that person a higher premium.
However, there are circumstances where you need to take out your own insurance. If you will be driving more than once or twice a week, say as part of your daily commute, you will need your own policy. If you’re not sure what a “secondary driver” is, ask your insurer. Failure to follow the rules of your policy may invalidate your cover.
This post How much does insurance cost for a new driver?
was original published at “https://www.moneysense.ca/spend/insurance/auto-insurance/new-driver-insurance/”
