When your teenager gets behind the wheel for the first time, your nerves are shot. Are they driving smoothly? Will they damage the car? Are they paying enough attention to the road? Will they make it home okay? All these thoughts, and so many more, rush through your mind when your child reaches driving age, but there is often one other major concern: the affordability of car insurance.
Auto insurance companies consider all those under 25 to be high-risk drivers. This means that costs to insure your young driver can be high. This combined with the fact that in Ontario all drivers must be insured, can make you, as a parent, think that it might just be easier if your child not drive at all. But then you remember how much better it would be if they could drive themselves to school, practice, friend’s houses, appointments, and work, and then you’re back to considering insurance again. Luckily, there are ways for young drivers to save on auto insurance.
Take a Driving Course
Enrolling and completing a defensive driving course or safe driving program can qualify young drivers for insurance discounts. Insurance companies view course participants as more responsible and more knowledgeable than those who drive without taking courses. While it costs money up front to take the class, the certificate at the end will give you and your insurance company peace of mind and will save you money in the long run.
Progress through the Graduated Licensing program ASAP
While the government gives drivers five years to go through the process of getting a G license, getting it done as quickly as possible will lower a young driver’s insurance rates. Once a driver has graduated each stage of the licensing program (G1, G2, G), insurance companies will often lower insurance premiums. A G driver is considered less risky than a G2 driver because their skills have been assessed by a professional government agent. Another benefit of taking the driving course is that it moves the process along faster. Graduates can take their G1 road test (which gets you your G2 license) only 8 months after the G1 written test rather than the typical 12 months.
Look into Student Discounts
Sometimes it pays to be a student. Some insurance companies offer students with good grades lower insurance premiums. Students who work hard at school are considered more responsible by insurance companies and less likely to be in a collision. There are also opportunities for full-time post-secondary students and recent graduates to get auto insurance discounts. Be on the lookout for these opportunities!
Be an Occasional Driver
Being an occasional driver on a parent’s vehicle is often more cost-effective than being a primary driver. Because an occasional driver is not driving as often, they are at less risk to get into an accident. Moreover, being an occasional driver on a policy helps young drivers build up insurance history so that in few years when they go to purchase their own vehicle, they will be in better standing with an insurance company and will face lower premiums as a primary driver.
Consider a UBI policy
Usage Based Insurance (UBI) are policies based on a person’s driving habits. To prove to your insurance company that your young driver isn’t like all the other young drivers on the road, using or installing a device that monitors driving habits could help lower your premiums. The technology (sometimes a device installed in your vehicle, other times just a phone app) sends data from your vehicle to your insurance company and keeps track of things like braking, turning, acceleration, and speed. By law, the information from the device can never be used to increase your insurance policy, it can only help save you money.
Change Your Vehicle
Certain vehicles are considered riskier than others. If you’re considering a vehicle for your young driver, or you’re in the market for a new one, make sure you do your research before buying. Insurance companies use the Canadian Loss Experience Automobile Rating system (CLEAR) to decide the riskiness of your vehicle. The CLEAR system investigates everything from how likely your vehicle is to get stolen to how much replacement parts for your vehicle cost. Insurance companies use this information to decide if your vehicle is a risk to insure. Doing your research before you buy a vehicle could ultimately save you a lot in insurance costs.
Talk to Your Broker
Some insurance companies will be more willing to insure young drivers. Other companies might offer your young driver better rates based on some of the factors above. When it comes time for your teenager to get behind the wheel, your best bet is to shop around for the best insurance. Let us do the work for you. We will look at your current policy and investigate other options available to you and your child to find you the best option for your needs and budget.
Questions about auto insurance? Don’t hesitate to ask! Contact us today.