Guide to Student Car Insurance for Young Drivers
Let’s be honest, for young drivers, car insurance rates will be higher than for those with more experience behind the wheel. Dealing with these higher premiums presents a big challenge to your budget, but you can find ways to save on car insurance if you’re willing to do your homework.
Not to worry, though, if you’re in this situation—once you prove your trustworthiness behind the wheel, you’ll soon be paying more reasonable insurance premiums. Meanwhile, it’s worth trying to find insurance rates that won’t put you in debt before you’ve even begun to work full-time. Why not? It’s always good to save money.
Let’s look at what is involved.
How Does Student Car Insurance Work?
Students paying for car insurance get the same insurance policies as everyone else. You’ll be offered the following coverage:
- This is mandatory coverage throughout Canada.
- You will be protected if you’re at fault in an accident that injures someone or damages their property.
- If you suffer an accident, your medical costs and rehabilitation will be covered.
- Depending on your policy, you may receive loss-of-income benefits if the collision prevents you from working.
- You may also obtain funeral-cost coverage if you want to prepare for the worst-case scenario.
- This coverage includes the cost of repairing damage to your vehicle as a result of colliding with another vehicle or with an object on the road.
- This coverage comes into play when your car is stolen.
- Comprehensive coverage also protects you when your vehicle is damaged by falling objects, vandalism, turbulent weather, etc.
- If you’re hit by a driver who lacks insurance or by a hit-and-run driver, you’ll be covered.
Why Do Young People Pay More For Car Insurance?
Individuals younger than 25 are still acquiring the experience they need to become seasoned and skilled drivers. Because insurance companies regard younger people as greater risks, these customers generally pay higher premiums.
What Type Of Car Insurance Do Students Need?
Shop on the basis of your needs. You don’t want to pay for either too much coverage or for too little coverage. There should be value in your selection, and it should be appropriate to your driving preferences and purposes.
As a student, you’re probably not earning a huge salary. Yet you must often pay higher premiums than older drivers do. So you should think twice before getting the most comprehensive coverage. Do you really need it?
The question is especially worth asking if you’re going to be driving your dad’s 10-year-old beater or other used and dispensable car. Depending on the vehicle, it may not even be worth fixing after an accident. If so, it would probably be a good idea to skip coverage related to collision or accident repairs and save yourself a big chunk of change on your premiums.
Don’t get taken by savvy salespeople trying to woo you with flashy packages providing coverage that sounds appealing but isn’t relevant to your situation. On the other hand, don’t be too stingy either; that could cause a big problem for you if disaster strikes. Opting out of coverage that might save your neck will leave you kicking yourself for years to come.
Sit back and really think about how you will be using your car in the near future. Research the problems that students tend to have with coverage. Decide what insurance plan to buy only after you have taken the time to fully inform yourself.
How Much Does Student Car Insurance Cost?
Students and other young people lack access to the same cheaper insurance rates available to experienced drivers. Yes, can get the same coverage as any other person with a license—but at a less favourable price.
Because you have spent relatively little time behind the wheel, the insurance companies can’t trust you as much as they trust veteran drivers. They regard you as much more likely to have an accident.
The result is that, throughout the nation, the average car insurance costs for students are a staggering 142% higher than the average costs paid by all drivers.
But this number represents a comparison of national averages. Depending on the province, you’ll end up paying anywhere between 126% and 210% of the average rate.
Research indicates that Ontario is the most expensive province for younger drivers to acquire insurance in Canada. New Brunswick is the most affordable province.
In Ontario, the average student rate for insurance in Ontario is $4,144—a jaw-dropping number, especially when compared to the $1,505 average that other drivers pay.
New Brunswick’s average student rate is $1,867; the overall average in the province is $867. Although the student rate in New Brunswick is much greater than the average rate paid by all drivers, it’s obviously easier to take than the average rate paid by students in Ontario.
Does this mean you should change where you attend university solely in order to avoid skyrocketing car insurance premiums?
Probably not. But it’s one factor worth considering if you’re trying to be frugal as you acquire quality education.
Why Is First-time Car Insurance So Expensive?
As we’ve noted, newer drivers present more risk, which means higher costs. When you combine that consideration with residency in an area with more difficult driving circumstances, the rates get even higher.
Finding ways to reduce these costs is essential to your financial health. Otherwise, you’ll be stuck with insurance rates that feel more like mortgage payments.
How To Get Cheap Car Insurance For Students
Here are a few hacks to reduce the steep cost of student car insurance.
Level Up Your License
- Vehicle insurers look kindly on full licenses. For example, in Ontario, someone with a G2 permit pays 10% more than a driver with a full G license who has no accidents or tickets on his record.
- Insurance companies trust that you’re a reliable driver once you’ve earned your full G.
Add Yourself To A Parent’s Car Insurance Policy
- If either of your parents has a good driving history, you can take advantage of it by getting listed as a secondary driver on his or her policy. Using this strategy will give you a much more affordable rate.
Take A Driver’s Education Course
- Your certified learning as a driver shouldn’t end once you have acquired your G2—especially if you want to pay the lowest possible insurance rates.
- Taking an officially certified course inspires trust. Now trusting you to drive more safely than other young drivers, your insurer will reward you with a more favourable premium.
Choose A Student-friendly Insurer
- Some insurers offer discounts based on your enrollment in a high school, college, or university. Find out whether such a discount will be available to you.
Apply For Financial Aid
- Various groups, affiliations, and unions partner with insurers so that members can receive discounts.
- Ask the financial aid office at your school whether it has any partnerships with such organizations.
Hit The Books
- If you improve your GPA, an insurer may reward you with a lower auto insurance rate. Some insurers will knock as much as 25% off the price.
Maintain A Healthy Credit Score And Credit History
- Some car insurers will reward you for having excellent credit by offering a favourable premium.
- When you turn 18, apply for a credit card, and pay your balance in full every month. Doing so will prove your creditworthiness and bolster your score.
Don’t Rush Your Decision
- We live in a digital age, which means that a ton of information is at your fingertips. So don’t jump the gun when purchasing insurance. Take your time and compare policies and quotes until you find something that suits you.
As a student, you may have an uphill battle when seeking affordable car insurance. But with a little research and persistence, you can find plenty of ways to reduce the cost.