Teen drivers face some of the highest car insurance rates around, making it a challenge to get a good rate. Inexperience is a major factor in the high rate of teen collisions, but there are some ways a teen can compare rates and save using a car insurance calculator and a little understanding of the options available.
Teen Drivers and Graduated Licensing
Every province in Canada uses a graduated licensing system to ease teens into the responsibilities of driving. Graduated licensing includes requirements for drivers with a learner’s permit and restrictions on newly licensed drivers for a certain period of time.
Most of the restrictions are designed to protect teens against the factors that contribute to serious accidents, which include driving at night and drinking and driving.
According to MADD, motor vehicle crashes are the top cause of death among 16 to 24-year-olds, and in 55% of those crashes alcohol is a factor. Most graduated licensing programs have a zero tolerance policy for the use of alcohol.
Many provinces use multiple driver tests over time to prove that the driver has the skills necessary to handle unsupervised driving day and night and in varying traffic situations, such as highway driving. In some provinces, particularly Ontario, certain highways are off-limits to drivers until they complete the graduated licensing program.
Teen Driving Statistics
As of 2013, Transport Canada reported that there were over 1,167,000 licensed drivers between the ages of 16-19 on the road. Those drivers accounted for 8% of traffic fatalities in the same year and 7.5% of injuries. Their passengers accounted for 15.2% of deaths and 16.1% of injuries.
The age with the highest rate of traffic accidents is 19 years old – which places these drivers just past the graduated licensing restrictions and also in the age group where consumption of alcohol has become legal. Not surprisingly, 19-year-old drivers have the highest rate of drinking and driving.
What Impacts Teen Insurance Rates
The statistics above make it fairly clear why teen drivers face some of the highest insurance rates around. Teens are inexperienced, which leads them to make more mistakes. They are also commonly involved in accidents involved drugs and alcohol. Distracted driving due to cell phone use is a rising concern as well.
Having tickets or accidents on their record impacts all drivers, but for a teen that already has higher rates, an at-fault accident or a ticket can have a major impact on rates.
Other things that impact rates:
- How often the teen drives, whether commuting to school or work
- Where the teen lives (by zip code)
- The type of vehicle the teen drives; some vehicles have higher rates than others
There are some things that can positively impact rates for teen drivers. Among them are a number of opportunities for discounts on rates. These include:
- The insurance history of the parent or guardian who adds the teen to a policy. Insurance companies frequently offer better rates overall to customers who have been with the company a long time and are claim-free.
- Discounts available on the parent or guardian’s policy that may apply to the teen’s rates as well, such as multi-car
- Good Student Discounts. Most insurance companies will offer a substantial discount to teens that maintain a certain average at school, as good students are believed to be better drivers. The requirement is usually a B average or 3.0 GPA. This discount can apply to high school and university students
- Driver Education Discounts. Most insurance companies offer some sort of discount for taking a driver education course. Some even offer their own course that the new driver can take in return for an insurance discount.
Insurance Policies and Teens
Most teens can be added to the insurance policy of a parent or guardian, and this is certainly the easiest and most cost-effective way to handle teen insurance. All teens need to have insurance as soon as they are licensed.
While it can be tempting to take out a minimum insurance policy on a teen to keep costs down, the higher likelihood of an accident makes that a bad risk. The driver in your household with the highest risk of needing to use your insurance shouldn’t be the one with the least coverage.
Shopping around is the key to finding a good rate for a teen driver, and this may mean shopping around all of the car insurance policies for the entire family. A car insurance rate calculator can make this task a lot easier. It’s best to take some time to shop around before your teen gets a license; this will give you time to find the best rate and switch if necessary before the coverage is needed.
If you have a choice, choose a less expensive car for your teen to drive. Remember that sports cars are very expensive to insure – and their high-speed capabilities make them a dangerous choice for teens. Cars that have lower rates overall will also have lower rates for teens. The top three least expensive cars to insure in Canada as of 2015 data are the Hyundai Accent, the Volkswagen Jetta, and the Honda Accord. Using a car insurance calculator to test rates for different cars can make the selection easier.