Finance
How much is insurance for a new driver in Ontario? – MoneySense
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How much does insurance cost for new drivers in Ontario?
On average, insurance for new drivers in Ontario ranges from $3,000 to $6,000 per year, according to Ratehub.ca. (Both Ratehub.ca and MoneySense.ca are owned by Ratehub Inc.) Where exactly you’ll fall in this range will depend on several factors, including your gender, driving history and location, as well as the make of your vehicle, among several other factors.
Underwriting policies vary between insurers, but below are typical quotes for individuals who started driving at age 16 and completed Ontario’s graduated licensing program. (Insurers quote transgender and non-binary individuals based on their sex identified at birth.) The policy quotes below do not include any discounts or modifications.
| Age | Sex | Low | Average | High |
|---|---|---|---|---|
| 18 | Male | $3,751 | $7,340 | $10,928 |
| 18 | Female | $3,173 | $5,150 | $7,127 |
| 30 | Male | $2,835 | $4,195 | $5,555 |
| 30 | Female | $2,871 | $4,519 | $6,167 |
| 35 | Male | $3,051 | $4,031 | $5,010 |
| 35 | Female | $3,186 | $4,356 | $5,527 |
| 40 | Male | $2,493 | $4,035 | $5,576 |
| 40 | Female | $2,491 | $4,349 | $6,206 |
Source: Ratehub.ca
In 2017, Ontario added a third gender option, gender X, to driver’s license applications (and by 2019, so had the rest of the country). “There are no Canada-wide guidelines on how insurance companies should set rates for gender X drivers,” says Ratehub.ca. “Some insurers may offer a rate in line with what a female driver will see; others may offer an average rate between the male and female premiums.”
Why is insurance for new drivers so expensive?
Several factors contribute to the high-end insurance costs for new drivers in Ontario, but they all boil down to one factor: risk. It’s more expensive for insurance companies to underwrite (promise to pay for) these policies because newer drivers have less experience and a higher accident rate than more experienced drivers.
According to the American Automotive Association, crash rates for drivers aged 16 to 19 are two to four times higher than drivers aged 30-plus. Canadian statistics are similar, the Insurance Bureau of Canada (IBC) has confirmed. Insurance companies need to ensure that the premiums they charge drivers can cover the cost of payouts in the case of an accident, resulting in considerably higher rates for less experienced drivers.
Insurance rates are also influenced by market conditions (inflation, labour costs, repair costs) and other factors (theft, fraud), according to the IBC’s website.
How can you decrease the cost of new driver insurance?
While insurance for new drivers may cost a lot, there are several things you can do to lower the expense.
1. Join an existing policy as an occasional or secondary driver.
If you’re a new driver, it may cost less for you to be added to a family member’s existing insurance policy as an occasional or secondary driver than it would to get a separate policy. Note, however, that if you’re listed as an occasional or secondary driver, it’s extremely important that you’re not using the car more than 50% of the time, or you risk losing your coverage.
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Mikael Castaldo
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