Licence class affects your car insurance premium.
Author of the article: Michelle Bates, LowestRates.ca Published Dec 23, 2023 Article appeared in www.driving.ca.
Whether you’re an experienced driver or a beginner just finding your footing, it’s important to understand how insurance providers weigh your licence class.
Typically, a newly licensed driver is associated with more risk than a fully licensed driver with a few years of experience under their belt.
While there are factors that have more of an impact on the rate you pay for car insurance, your licence class interacts with other data to calculate your individual premium.
Here’s how it works. G1, G2, and G car insurance premiums.
In Ontario, the three licence classes include the G1, G2, and G licence. Each class will have a different impact on the rate you pay for insurance.
G1 and secondary drivers Drivers with a G1 licence aren’t permitted to drive on their own, so they don’t need their own insurance policy.
However, the fully licensed driver who accompanies the G1 driver should still let their insurance company know they occasionally have a G1 driver behind the wheel.
It may not impact the G driver’s premium just yet, but in the event of a collision, you want to avoid withholding any information that could impact a claim.
Once a G1 driver becomes a G2 driver and can drive on their own, they have to either be added as a secondary driver to an existing insurance policy or purchase their own.
According to Theresa Wicks, sales manager at Mitch Insurance, adding a newly licensed, secondary teen driver to a primary driver’s insurance policy can increase that premium by hundreds or even thousands of dollars annually, depending on the person.
For example, a 17-year-old male driver living in Keswick, Ontario with no tickets or accidents who completed a driver education program would increase a primary driver’s premium by at least $675 per year.
Meanwhile, a 17-year-old male driver who didn’t finish a driver education program living in the same location with the same driving record can increase a primary driver’s premium by at least $750 annually.
Though the primary driver will have a higher rate, the payoff for the novice driver will be worth it in the long run. “Adding a newly licensed teen driver to your insurance policy is a great way to help them build their insurance history,” says Wicks.
“Every year that a newly licensed driver is insured improves their insurance history and helps set them up for less expensive rates in the future.” G2 drivers versus G drivers Drivers with G2 and G licences will likely see a difference in premium.
But what can influence each premium more than license class is whether or not the driver completed a driver education program.
According to the Lowestrates.ca auto insurance quoter, a 35 year-old male driver with a G2 licence who opted for a driver education course and drives a 2022 Honda Civic would see an annual premium of at least $8,664.
However, if the same G2 driver didn’t complete a driver education program, he’d pay an annual premium of at least $9,777.
That’s a difference of $1,113 per year.
Completing an MTO-approved drivers training course immediately makes a driver more experienced in the eyes of insurance companies, netting them the equivalent savings as three years of claims-free insured history.
It’s worth noting that the drivers training course only nets a new driver these lower premiums for three years.
After they’ve completed their full licensing and have accumulated four years of claims-free insurance experience, then they can start seeing continued lower premiums in accordance with their driving history.
According to quoter data, a recent G-licensed driver of the same age would expect to pay an annual premium of $9,361.
That’s a $416 difference from the first driver.
However, they may be subject to the same variance depending on whether they completed a driving course.
When purchasing insurance as a newly licensed driver of any age, a broker will be able to discuss the specifics and suggest other potential discounts that you may be eligible for.
How much does licence class affect your premium?
While having an early-stage licence and therefore a lack of driving experience causes your insurance premium to be higher, the make, model, and year of your vehicle actually tends to impact your premium more, along with other factors like driver education.
It’s best to focus on the factors you do have control over, like the vehicle you drive or your driving record.
Choosing a safe vehicle that isn’t too pricey to repair and keeping your driving record free of traffic violations will go a long way.
And by the time you’re fully licensed and have a longer insurance history, your good performance will help ensure you see a lower rate.
