As a new driver in Ontario, you likely have many questions about car insurance, and your number one question is likely, "How much does it cost?” The truth is that Ontario has some of the highest auto insurance costs in the country, especially for young drivers.
While insurance rates vary based on individual factors, new drivers can generally expect to pay anywhere from $3,000 to $7,000 or more annually, which translates to $250 to $583 in average monthly car insurance rates in Ontario.
Remember, driving without insurance in Ontario is illegal. So, before hitting the road, take a glance through our auto insurance guide for young drivers below.
Average car insurance cost for a new driver in Ontario
The exact cost can vary greatly based on age and driving history. For example, on the high end, an 18-year-old male could pay as much as $910 a month for car insurance or as little as $313. Female drivers who are also 18 can pay as much as $594 or as little as $264.
Note: these examples include comprehensive and collision insurance. Removing one or both of these coverages can lower the cost of car insurance.
Why are car insurance rates higher for new drivers?
Car insurance premiums tend to be higher for younger or new drivers mainly because of the increased risk. New drivers have less experience and road knowledge, making them more likely to be in accidents, which raises their insurance costs. Statistically, teenagers have more car accidents and related injuries. MADD reports that this is due to their lack of experience, driving under the influence, and impulsive behaviour.
Statistics also show that young adults are less likely to wear seatbelts, more likely to drive recklessly, and more likely to use cell phones while driving. Young men, in particular, tend to exhibit these behaviours more, leading to even higher insurance premiums compared to females.
What affects car insurance rates for new drivers?
Now that we’ve covered why average car insurance costs are high for new drivers in Ontario, let’s talk about factors that determine your insurance rates. Like with all drivers in Ontario, there are many factors that determine the cost of car insurance premiums, even for new drivers. Besides risk, these factors include:
Vehicle type
Your insurance cost varies with the make and model of your car. Insurance providers consider maintenance costs, replacement costs, and the likelihood of your car being stolen. The best cars for students will be ones that are reliable and affordable to repair.
How often you drive
Daily commuters pay more than those who mainly use their car on weekends.
Where you live and work
The area where you drive impacts your insurance cost. Drivers in busy or accident-prone areas, like big cities, generally pay higher rates. For example, Toronto's car insurance rates will be different than those of those living in other areas of Ontario.
Your driving history
Your driving record is crucial. Insurance companies check for traffic violations, citations, and accidents, whether you’re getting your own insurance or being added to your parent’s policy. Premiums for car insurance in Ontario also have to do with the prevalence of insurance fraud within the province.
How your graduated licensing affects your insurance
As a new driver with a G1 in Ontario’s graduated licensing program, your insurance will be at the highest it will likely be for the rest of your driving experience. However, once you move from a G1 to a G2 licence, you can expect your insurance to potentially lower for the first year as long as you have a clean driving record. Then, as you move from your G2 to your full G licence with a clean driving record, you can expect another potential discount for the first year.
What level of driver needs their own insurance policy?
In Ontario, anyone who owns or leases a car needs insurance, whether you have a G2 or G licence. G1 licence holders, on the other hand, don’t need their own policy because they can’t drive alone. If you often drive your parent’s or sibling’s car, you should be added to their insurance policy as a secondary driver or occasional driver.
What insurance coverage does a new driver need in Ontario?
As a newer driver with a G2 or G licence, you need to carry your own valid insurance policy in order to drive legally in Ontario. Every province has its own requirements, and Ontario’s liability car insurance includes third-party liability, accident benefits, and uninsured motorist coverage. Here’s how they protect you:
Third-party liability coverage
Third-party liability insurance is a required coverage that covers your financial responsibilities if you’re at fault in an accident and cause injury or property damage to a third party. This includes medical bills, rehabilitation costs, and property repairs. The minimum coverage in Ontario is $200,000, but most drivers opt for higher coverage to be fully protected.
Accident benefits coverage
Accident benefits coverage is also a mandatory part of Ontario car insurance. This coverage helps pay for medical expenses and other costs for you and your passengers if you’re in an accident, no matter who is at fault. It covers a variety of injuries and health-related expenses and can include additional costs like funerals or caregiving.
Uninsured motorist coverage
Uninsured motorist coverage is required if you’re in an accident with an uninsured, underinsured, or unidentified driver, such as a hit-and-run. If the at-fault driver doesn’t have enough insurance, this coverage pays for medical bills, property damage, and other related costs.
Direct compensation–property damage (DCPD) coverage
Ontario has a no-fault insurance system known as DCPD coverage. When you’re in an accident caused by another driver in Ontario, a special type of insurance helps you out. Instead of dealing with the other driver’s insurance, your own insurance company handles your property damage claim. This makes the process easier for you, as your insurance company acts on your behalf to quickly and fairly resolve your claim.
While this used to be mandatory, as of January 2024, drivers can opt out of this coverage. However, if you choose to opt out of DCPD coverage, you waive your right to seek compensation from other parties involved in the accident, even if the other driver is responsible for the accident.
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What other coverages should a new driver carry in Ontario?
While basic coverage does protect things like third-party injuries and damage and medical bills, it doesn’t always cover damages to your own vehicle. This is where having additional coverage, like collision and comprehensive, comes in. Let’s talk about additional coverage options that can greatly benefit a new driver:
Collision coverage
This auto insurance coverage helps pay for major damage or emergency repairs to your vehicle after an at-fault collision. You’ll need to pay a deductible, which is a set amount you agree to when you start your policy before the coverage starts.
Comprehensive coverage
Comprehensive car coverage protects your vehicle against many non-collision-related risks, such as theft, fires, vandalism, severe weather, natural disasters, and wildlife. For example, if a large branch were to fall and damage your car while it’s parked on the street during one of Ontario’s strong summer storms, comprehensive coverage can cover the cost.
Accident forgiveness coverage
Accident forgiveness helps you avoid higher insurance costs for your first at-fault accident. Normally, your rates go up after your first at-fault accident, but with accident forgiveness, your company will waive the first accident, so your premium won’t increase. This can be especially beneficial for new drivers in Ontario as they are statistically more likely to be involved in an accident.
How can a new driver in Ontario save money on their insurance premiums?
There are two main ways that new and young drivers can save on car insurance rates. They have to do with selecting the right car and taking advantage of discounts:
Choosing the right car
As a young driver, you most likely will have to purchase or lease yourself a vehicle. And if you're a parent or guardian, you may be wondering, "What should I do when buying a car for my university student?"
It is important for you to know what types of cars are more expensive to insure versus less expensive when making a selection. Cars that are more likely to be stolen or cars that have parts that aren’t easily accessible will cost you more to insure.
Discounts
There are multiple discounts available for drivers in Ontario, especially those who are newly licenced or still in school. Here are some that you should consider talking to your insurance company or broker about:
Driver training discount
Anyone who has recently completed driving school or a training course is eligible for discounts on their premium. The same goes for completing an accredited defensive driving course.
Multi-vehicle discount
If you have multiple vehicles under one policy, the overall cost will be discounted. See if you can bundle your insurance with either your parents, siblings or spouse.
Good student discounts
Any student who is enrolled in either high school or post-secondary and maintains an average of at least 80 percent is eligible for discounts on student car insurance. Note that car insurance for international students may be different depending on your home country.
Safe driving discount
Unfortunately, this discount won’t be available to you right away, but it will become an option after you have some more driving experience. If you have a good driving recordand practice safe driving tips for a minimum of three years in a row, you could eventually get a discount on your young driver's insurance.
Winter tire discount
Switching to winter tires during the colder months can qualify you for a winter tire discount. This is because snow tires perform better in the winter, which lowers your chances of being involved in an accident.
Additional ways to find affordable insurance for new drivers
If you’re hoping for even more ways to carry a more affordable auto insurance policy as a new driver, we have a few tips and tricks to help, including:
Shop around for insurance
Don’t settle for the first insurance quote you receive. Take some time shopping around for various car insurance policies from multiple insurance companies to find the best quote for your needs.
Opt to pay annually
Insurance companies often charge extra fees, like administrative fees, for each payment made, so paying annually instead of monthly will save you more money. If you can afford to do so, try to save up throughout the year to make one payment instead.
Increase your deductible
Your deductible is the amount you have to pay your insurance company before they cover your insurance claim. A common deductible amount is $500. However, if you increase it, the insurance company will have less money to pay out for the claim, meaning lower premiums. Just make sure you can afford to pay for the higher deductible should you need to make an unexpected insurance claim.
Partner with a local car insurance broker
Working with a local insurance broker can help you save both time and money on car insurance. Brokers do the leg work for you by shopping around and comparing quotes from top insurance companies in your area to find you the best policy at the best price.
Contact BrokerLink to learn more about car insurance today
Are you a new driver looking for car insurance in Ontario? If so, let BrokerLink be your one-stop shop for high-quality, customized insurance policies from some of Canada’s top insurance providers.
You can reach us by phone, email, or in person at any one of our locations throughout Ontario. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. Don't forget to take advantage of our free online quote tool to get competitive car insurance quotes right from your device!
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FAQs regarding the cost of insurance for new drivers in Ontario
How does having a university student affect my insurance premiums?
You may be thinking, "how does having a university student affect my insurance rates?" If you are the primary driver on your insurance and your teenager wants to drive your vehicle, you may want to put them on as a secondary or occasional driver so they can get to and from school. This may increase your monthly payments slightly, but it depends on your insurance company.
How do I register my vehicle in Ontario?
If you have any questions, contact one of our local branches.
