A Beginner’s Guide to Car Insurance for Young Drivers
It’s a big deal to get your driver’s licence! But now that you’ve mastered the rules of the road, it’s time to learn the ins and outs of car insurance. In this article, we’ll break down who’s considered a young driver, when you need to take out your first insurance policy, what coverage you’ll need and how your car insurance is priced—plus a couple of ways to save!
What’s the difference between a young driver and a new driver?
Some people are eager to get their licence as soon as they can, while others wait until later in life when they really need it. But it’s important to distinguish between new drivers and young drivers, because each group has a unique risk profile that influences their insurance rates differently.
No matter how old you are, if you’ve just passed your driving test and gotten your licence, you’re considered a new driver. That said, not every new driver is considered a young driver. The age cutoff for young drivers varies from insurer to insurer, but we define a young driver as anyone under 30 years old. In a nutshell, from an insurance perspective, new drivers are defined by their lack of a driving record, while young drivers are defined by their age.
At what point in the licensing process do you need to be insured?
Anytime you drive, you need car insurance, whether it’s your car or someone else’s. While each province and territory has its own licensing process, many of them break it up into 3 stages for new drivers to gain experience. Here’s a breakdown of your car insurance needs at each stage:
- Learner’s permit: As a learner, you have to be accompanied by an instructor or a qualified driver. If you’re in a driver education program, your instructor’s insurance should cover you. If you’re learning to drive using a friend or family member’s car, they should notify their insurance company.
- Probationary licence: After you pass your driver’s test, you can drive on your own. If you get your own car, you’ll need car insurance. But if you continue to drive someone else’s car, make sure their insurance company has been notified.
- Full licence: You’ve gained enough experience to earn your full driver’s licence! If you drive your own car and have kept a clean driving record, this experience may help bring down your car insurance rate. If you keep driving your friend’s or family member’s car, you still need to be listed on their insurance.
For more information about the licensing process, check with your provincial or territorial government’s website.
Young drivers who borrow their parents’ car
Cars can be expensive, so it makes sense that a lot of young drivers borrow their parents’ car. No matter what type of permit or licence you have, if you’re using your parents’ car, you should be declared as an occasional driver. Their insurance company will then assess your risk profile and decide whether you need to be added to their policy.
For more details, parents should reach out to their insurer to find out how they handle occasional drivers.
What should new drivers look for in a car insurance policy?
While every jurisdiction has its own mandatory minimums for coverage, there are generally 3 main categories, plus some other options you’ll want to consider as a new driver.
Damage or injuries caused to other people
Third-party liability insurance coverage is mandatory across Canada. It helps cover claims if you’re legally responsible for injuries to others or damage to the property of others due to an accident. There can be differences in how insurance is provided, depending on where you live. Minimum coverage requirements vary, but one thing is for sure: if you’ll be driving a car, you’ll need liability insurance.
Injuries to you and anyone else who is eligible for coverage
Some form of coverage is also mandatory across the country for injuries resulting from a car accident. Depending on your province or territory, this could cover the driver and anyone else who’s eligible for coverage. It’s provided through accident benefits or a provincial public injury insurance system, like the SAAQ in Quebec, and may help cover medical, rehab and other costs related to bodily injury, regardless of who caused the accident.
Damage to your car
Most provinces and territories don’t require you to carry coverage for damage to your own vehicle, but some lenders do, and repairing or replacing your car can get pricey. There are 2 common options:
- Collision or upset: Covers damage to your car if you’re in an accident, including if your car rolls over
- Comprehensive: Covers damage from fire, theft, vandalism and certain weather-related events and other covered losses
Other types of protection to consider
When you’re new behind the wheel, additional protections can help set your mind at ease. Some common options include:
- Roadside assistance: If you run out of gas or your car breaks down, someone can help you get back on the road.
- $0 deductible: With this protection, you could pay zero deductible when a covered claim results in damage to your vehicle.
To discover other options, visit our page on car insurance coverage.
The right protection for you
Everyone has different insurance needs, depending on where they live and how they use their car. Speaking with an insurance company can help you figure out how to build the right policy for your needs.
1 In British Columbia, Manitoba, Saskatchewan and Quebec, this coverage is available through a public plan.
À noter : This is not an exhaustive list. Please speak with an insurance company or check your province or territory’s car insurance requirements for a complete overview of your coverage requirements and options.
Why do new drivers pay higher premiums?
New drivers can face a lot of expenses right off the bat: driving school, licence fees and car payments. On top of that, there’s car insurance costs. Why do premiums cost so much?
Top factor: Lack of experience behind the wheel
Statistically speaking, new drivers are more likely to get into accidents. They’ve had less time to hone their skills and develop their road awareness. Because insurance companies calculate premiums based on risk, they make more conservative risk assessments for this group.
Plus, new drivers don’t have a driving record, one of the most important factors in establishing a premium. The long and short of it? New drivers are considered a higher risk to insure.
Other factors: Age, vehicle, use, location and coverage
While your driving experience and risk profile are 2 key factors in determining your premium, several other factors come into play:
While your driving experience and risk profile are 2 key factors in determining your premium, several other factors come into play:
- Your age
- The type of vehicle you’re insuring (value, horsepower and repair costs)
- How you use your vehicle (mileage, personal versus work use)
- Where you live
- What coverage and deductibles you choose
To learn more about each factor, check out our article on how car insurance premiums are calculated.
How can new drivers keep car insurance costs down?
By making a few smart choices, you may be able to lower your premium:
1. Build asolid driving record
Since the number one factor in pricing a new driver’s premium is their lack of a driving record, the best thing you can do is show you’re not a high-risk driver. Every year of safe driving helps! By staying focused behind the wheel and avoiding accidents and tickets, you can set yourself up for lower premiums in the future.
2. Choose the right car
Different cars have different insurance needs. If, for example, a car is more expensive to repair, it’ll be more expensive to insure. More horsepower also tends to be pricier to protect. As you shop around, look for a car with a good safety rating that suits your needs and your budget. Before you buy, get a couple insurance quotes to understand how much it would cost.
3. Adjust your deductible
Your deductible, or the amount you pay out of pocket for a claim, can have an impact on your premium. Typically, the higher your deductible, the lower your premium. However, before you raise your deductible, take some time and think about what you could actually afford if something were to happen.
4. Ask about discounts
It never hurts to ask if your insurance company offers any ways to save! You might be surprised to find that you qualify for a student discount, or that if you complete a recognized driver training course, you could lower your annual premium. Discounts like these often vary by province and territory, so you should speak with an insurance company to learn more.
5. Bundle your policies
Many insurance companies offer bundle and save programs. Don’t have home insurance? If you live with your parents, you may qualify for a multi-vehicle discount if you insure your car with your parents’ insurance company.
For more ideas on making your car insurance more affordable, check out our article on how premiums are priced and ways to save.
What we offer young drivers and new drivers
At Desjardins Insurance, we want to help young and new drivers stay safe when they get behind the wheel. That’s why we offer specific advantages for young drivers and a telematics program to help you save more.
Advantages for young drivers in Quebec
Are you a young driver in Quebec? You may be able to benefit from:
- A car insurance discount for drivers under 30
- Free roadside assistance for Desjardins caisse members under 25
To learn more about our available discounts, check out our home and car insurance discounts and savings.
Tailored coverage with Ajusto®2
Our telematics program takes into account your driving habits and behaviours to offer you a more personalized car insurance premium. It can pay to drive safe with Ajusto!
Ready to get a car insurance quote?
At Desjardins Insurance, we know that it’s a big deal to get your licence—and just as big of a deal to have the right car insurance policy! Get behind the wheel with an insurance company you can trust and get a quick and easy quote online for car insurance.
Key takeaways
Whether you’re a young driver or a new driver (or both!), you need to be insured when you get behind the wheel. If you’re driving a family member’s car, make sure you’re declared as a driver to their insurer. But if you have your own car, it’s time to shop for coverage. At minimum, you need third-party liability and, depending on your province or territory, accident benefits or any other required protections. Although premiums can be pricey for young and new drivers, there are several actions you can take to keep insurance costs down while protecting your peace of mind.
FAQ: Car insurance for young drivers
Insurance companies define young drivers by age, usually anyone under 30. New drivers are defined by their experience. No matter how old you are, when you first get your licence, you’re considered a new driver. Many new drivers are young drivers, but if you’re 28 and got your licence at 18, you’d just be considered a young driver, as you’d have 10 years of driving experience. On the other hand, if you’re 38 and just getting your licence for the first time, you’d be a new driver, but not a young one.
Yes, anytime you drive you need to be insured. But you don’t necessarily need your own insurance policy when you’re learning to drive. If you’re driving a family member’s car, you just need to be declared on their insurance. Otherwise, if you get into an accident and you’re not declared, there could be real complications, such as your claim being denied.
There are several ways you can reduce your premium:
- Keep your driving record clean
- Choose the right car
- Adjust your deductible
- Enroll in a telematics program like Ajusto
- Ask about discounts and bundling
If you’re driving your parents’ car, their insurance company must be notified and add you as a secondary driver. If you own your own vehicle, it may be possible to be added to your parents’ insurance policy to benefit from a multi-vehicle discount. It all depends on where you live and whether you meet the insurance company’s eligibility requirements. It’s a good idea to reach out to the insurer directly to find out what options are available.
No, requirements vary by province and territory. While all Canadian drivers are required to have car insurance, the mandatory minimum protections are different depending on where you live. For example, in Quebec, bodily injury is covered by the SAAQ. If you live outside Quebec, you may need to take out accident benefits through a different public insurance system or through a private insurer, depending on your province or territory. Speak with your insurance company to understand what’s required and what’s optional where you live.
Yes, in some cases, you can get a student discount on your car insurance. However, it all depends on where you live and who the insurance company is. In general, insurance companies offer discounts based on age, driving record and specific education programs (not necessarily your status as a student). For example, Desjardins Insurance has a discount for drivers under 30 in Quebec, as well as Ajusto, a telematics program that rewards safe driving with lower premiums. Check with your insurance company to find out what they offer and let them know your personal situation so they can help you find the right coverage at the right price.
Learn more
Ajusto® is a registered trademark of Desjardins General Insurance Inc., used under licence.
2 Ajusto is underwritten by Desjardins Insurance. Ajusto is only available in Alberta, Ontario and Quebec. Subject to the Terms and Conditions of the Ajusto Program in effect on the date of your enrollment. Visit our website at desjardins.com for details. The personalized premium can go up or down depending on your driving behaviours and habits. The discount and the personalized premium do not apply to certain endorsements or additional coverages.
Certain conditions, exclusions and limitations may apply.
The terms and conditions of the coverages described are set out in the insurance policy, which always prevails.
Auto Insurance is not available in MB, SK and BC due to government-run plans.
These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. We recommend using caution and consulting a certified insurance agent for comprehensive, tailored advice.
Savings are based on each client’s individual profile. Savings and discounts are subject to eligibility conditions. Rates and discounts are subject to change without notice.