Car Insurance for New Drivers Ontario – G1 and G2

It’s widely recognized that new drivers in Ontario face significantly higher car insurance premiums than individuals with more driving experience.

Driving experience is one key factor that insurance companies consider when determining car insurance premiums.  The more driving experience you have, the cheaper the cost of car insurance. Conversely, the less driving experience, the more expensive auto insurance becomes. 

Insurance companies conduct statistical risk assessments for drivers of all age brackets and recognize that new and inexperienced drivers pose a greater likelihood of car accidents.

Studies consistently show that new drivers, particularly teenagers and those in their early twenties are more likely to get into a car accident compared to more experienced drivers.

What is considered a new driver in Ontario?

A new driver is typically someone under 25 with limited driving experience. However, this classification can also depend on how long they’ve been licensed, regardless of age. In Ontario, insurance companies often use age and the length of time a person has held a driver’s license to determine if they fall into the new driver category. Generally, a new driver is defined as someone who has held a valid Ontario driver’s license for less than three years.

This Includes:

What is new driver car insurance in Ontario?

New driver car insurance in Ontario refers to the specific type of auto insurance coverage tailored for individuals who are newly licensed or have limited driving experience. This category typically includes young drivers, individuals who have recently obtained their G1, G2 or full G license, and newcomers to Ontario who are getting insured for the first time in the province.

Categories of New Drivers in Ontario

Several groups of people fall into the new driver car insurance category:

• Newly licensed drivers
• Immigrants and Newcomers from out of the country
• Drivers who recently moved to Ontario from another province
• Mature drivers getting insurance for the first time
• Young adults

How does car insurance work for a new Ontario driver?

In Ontario, the law mandates that all drivers must have valid auto insurance to operate a vehicle on the road, regardless of their driving experience. However, new drivers may face additional steps to secure insurance, particularly if they have prior driving experience from another province or country.

New drivers without prior driving experience

New drivers to Ontario without prior driving experience are typically young and often start their insurance under someone else’s policy as occasional drivers.  The most common scenario is for a young and new driver to begin insurance under their parent’s or guardian’s auto insurance policy. As new drivers progress through Ontario’s graduated licensing system, from G1 to a full G license, their driving experience increases and their insurance premiums typically decrease over time. However, other factors such as driving behaviour, traffic violations, and accidents also influence the price along the way.

New drivers with prior driving experience

New drivers to Ontario with prior driving experience can receive credit by providing proof of their foreign driver’s license to the Ministry of Transportation. However, when it comes to prior insurance experience, many insurers will only recognize history from certain countries, typically within North America, though this varies by company.

New Driver Car Insurance for G1 and G2 Drivers

New drivers in Ontario are affected by the structured and phased approach of the graduated licensing program, which grants full driving privileges upon completing the multi-step process. Drivers begin with a G1 license, progress to a G2, and finally achieve a full G driver’s license. Auto insurers adjust insurance premiums to reflect each licensing stage, typically starting with higher costs at the initial stage and gradually decreasing as drivers advance and gain more experience.

How car insurance works for new G1 drivers

There are specific conditions and restrictions for G1-licensed drivers, as it is the first stage in the graduated licensing program in Ontario, Canada. G1-licensed drivers, often young and inexperienced, require supervision while driving.

Here’s an overview of how car insurance works for new G1 drivers:

How car insurance works for new G2 drivers?

Car insurance for G2 drivers in Ontario, Canada operates similarly to insurance for fully licensed drivers but with some distinctions due to the G2 license being a probationary stage in the graduated licensing system. The main distinction is the insurance cost and how the premium is calculated for G2 licensed drivers. Insurance companies view newly, G2 licensed drivers as a higher risk due to their limited driving experience. However, G2 drivers must have the same mandatory coverage as fully licensed drivers, which includes liability, accident benefits and uninsured motorist coverage. (DCPD – direct compensation property damage is no longer a mandatory coverage as of January 2024.)

Do G2 new drivers need to be on their own policy?

New drivers with a G2 license can have their own insurance policy or be covered under someone else’s policy. This depends on the registered owner of the vehicle and the number of cars insured under a single policy.  If the G2 driver is the registered vehicle owner being insured, they need to have a separate insurance policy issued in their name. The policy would only be issued in their name if they are the registered owner of the vehicle.

How much does car insurance cost for a new driver in Ontario?

The cost of car insurance for a new driver in Ontario can vary widely depending on the following factors. On average, new drivers in Ontario can expect to pay between $3,000 to $6,000 annually for car insurance. Here are some key factors that influence the cost:

Age and Gender:

• Younger drivers can expect to pay more due to a higher risk of accidents
• Males pay more than females, as it’s statistically proven that female drivers are safer drivers

Driving Experience: 

• New drivers with little or no driving experience are considered higher risk and therefore pay more in car insurance 

Location:

• Location and postal code is a big factor in car insurance premiums. If you live in a densely populated area, like Brampton or Toronto, you will face higher premiums than somewhere less populated.  

Vehicle type:

• Vehicles vary in value. The higher the vehicle’s value, the more premium you will pay. This reflects the cost to repair or replace the car, should a claim arise.  

Coverage Level:

• Depending on risk appetite, a new driver may choose more or less coverage. However, some coverage, such as Uninsured Motorist, is mandatory and cannot be altered.  Some coverages such as liability can be decreased to generate a cheaper premium. 
• Deductible amounts can affect overall premium costs. Increasing your deductible will decrease your overall premium while lowering it will produce the opposite effect. 

Driving Record:

• Accidents, traffic violations (parking tickets not included), and cancellations for non-payment will increase the cost of car insurance.  The cleaner your driving record, the cheaper your car insurance will be. 

Discounts and Programs:

• Driver training from an accredited driving school recognized by the Ontario Ministry of Transportation can reduce your premiums by up to 15%. 
• Telematics or Usage-based car insurance monitors can help promote and foster safe driving habits and behaviour.   Savings of up to 20% can be realized by participating new drivers. 

Insurer Pricing:

• Insurance companies consistently and routinely change their pricing, so shopping around and comparing quotes is the only way to find the cheapest rate for new drivers.

Number of Drivers on the Policy:

• An auto insurance policy factors all listed drivers on a policy. The risk profiles of all drivers are used to calculate the final premium amount. The at-fault accidents and traffic violations of any one driver will impact the insurance rates for all drivers covered under the same policy. 

What’s the cheapest car insurance for new drivers?

Searching for cheap car insurance for new and inexperienced drivers in Ontario can be very challenging.  Not only must you contend with the highest auto insurance cost of any other province in Canada, but you’re also facing an added financial burden as a new or inexperienced driver.

Finding affordable insurance for new drivers in Ontario requires the same diligence as finding cheap insurance for any driver. This involves obtaining quotes from multiple insurance companies. Auto insurers in Ontario can adjust their pricing every three months if necessary. Therefore, exploring all options when purchasing or renewing your auto insurance is crucial, especially for new drivers.

Insurance companies consider your driving experience to forecast the probability of you being involved in an accident. Less driving experience coreelates with higher accident risk, resulting in higher premium costs.  As your driving history accumulates, your premiums will decrease accordingly. However, remember that your auto insurance premium is calculated based on many factors, not just driving experience. 

What’s the best insurance company for new drivers?

When searching for the best auto insurance company for new or young drivers, consider the following factors:

Cost:

• The cost of car insurance for new drivers is higher than for other categories of drivers, making it essential for most people to find the most affordable option.

Coverage Options:

• It’s important to know what type and amount of coverage you need, and what coverages can be reduced or increased. Some insurers may choose to restrict some coverages, while others won’t.  Increasing or decreasing your deductible according to your risk tolerance and budget can help narrow down the best car insurance solution. Moreover, opting in or out of optional loss coverages, such as rental coverage, and damages to non-woned vehicles can influence the overall cost. Always confirm with your broker or agent so you fully understand how increasing, omitting or dropping coverage will affect you. 

New Driver with Convictions

If you’re a novice driver in Ontario and have traffic violation convictions, you’re going to be paying more for car insurance compared to someone who has a clean driving record. The severity of the driving violation will determine if you require standard, high-risk or Facility auto insurance.  

The following table will show the eligibility guidelines according to the driver’s age, driver’s license class, driving experience and conviction type:

• One or more serious/criminal convictions in the preceding three years (decline) – high risk 
• One or more major convictions in the preceding three years (decline) – high risk
• One or more minor convictions in the preceding three years – (decline)  – high risk

New drivers with a combination of convictions, at-fault accidents and cancellations for non-payment

• One or more cancellations for non-payment and two or more convictions in the preceding three years.  (decline) – high risk
• One or more minor convictions and two or more cancellations for non-payment in the preceding three years. (decline) – high risk
• One at-fault accident in the preceding six years and two or more minor convictions in the preceding three years. (decline) – high risk

New driver licensed less than 4 Years or have a G1/G2 license

• One or more at-fault accidents within the last 3 years for a PO licensed less than 4 years, or licensed at a class G1 or G2. (decline) – high risk

• Never been listed as a driver on a policy, and has one or more at-fault accidents within the last year. (decline) – high risk

New driver car insurance with and without telematics – pros and cons

Most auto insurance companies offer a reduced premium in exchange for allowing them to monitor your driving behaviour through telematics, sometimes referred to as black-box or usage-based car insurance.  

Using Telematics means you would be transmitting your driving information such as hard turning and braking, fast accelerations and other driving habits, electronically, to the insurer. This is done by installing an electronic device into the Onboard Diagnostic Port (ODP) in your vehicle. 

The downside of using telematics is the potential invasion of privacy. Having your insurer constantly monitor and report on your driving habits can make some people feel uncomfortable and wary.

Impact of New Drivers on Insurance Premiums

Driving experience is a rating factor used by insurance companies to calculate premiums. The more driving experience you accumulate the lower your car insurance will be.  

Newer drivers have minimal driving experience, which increases the likelihood of a car accident occurring. The higher likelihood of having an accident is reflected in increased auto insurance premiums for new drivers in Ontario.

New drivers with demerit points

If you’re a new driver with demerit points, these points are likely linked to driving violations. However, insurance companies do not use demerit points for insurance rating purposes.

New drivers from Out of Country

New drivers arriving in Ontario from another country may receive credit for driving and experience from their home country. Insurance companies and the Ministry of Transportation will recognize this experience if documented proof of the license, issued by the respective governing body, is provided. The official letter or document must be authentic and written in English or French.

What if you have driving experience from outside of Ontario, but within North America?

Suppose you were ever a policyholder or listed operator on an Automobile insurance policy in Canada or the United States. In that case, you may be eligible to have the insurer honour your previous driving record and insurance history. 

The following documentation is required by the insurer to substantiate proof of your prior driving record:

• Letter from the previous company’s Underwriter or Agent/Broker
• Letter from the Military or Self-Insurer

What happens if you have driving experience outside of Canada and the United States?

If your driving experience comes from outside of Canada or the United States, you may face some difficulty in finding an insurer that will give credit for that experience. It depends on the specific insurance company whether they can offer any consideration or not. Using an insurance broker will help you locate companies that will honour some or all of your driving history, from outside of Canada and the United States. 

If you qualify for international driving experience, you’ll typically need a letter from the foreign government or agency that issued your driver’s license. This letter must confirm the license’s authenticity, be translated into English, and be notarized. Generally, the maximum credit for international driving experience is limited to three years for drivers coming to Ontario from outside Canada or the United States.

Tips on how to lower your car insurance as a new driver

Although car insurance can be costly for new drivers, there are several tips to help reduce the overall expense:

Pick the right vehicle:

• Some vehicles are more expensive to insure than others. Factors such as repair costs, vehicle value, and statistical data on claim frequency all contribute to the insurance cost for a particular vehicle.

Telematics or Usage-Based Insurance:

• Drivers who choose telematics or usage-based insurance can save up to 20% off their annual auto insurance premiums. This can translate to thousands of dollars in savings. 

Driver Training:

• Having a driver training certificate recognized by the Ministry of Transportation can save a new driver up to 15% off their annual insurance premium.

Increase your Deductible:

• Increasing your deductible will decrease your overall premium. However, keep in mind that you’d be responsible for paying your deductible on an insured loss. 

Pay the Annual Premium Upfront:

• Insurance companies charge a small fee for offering monthly payment options.  The rate is typically 1.3% for auto insurance, which can be eliminated if the annual premium is paid at once. 

Move to a Different City:

• Moving to another city to save on car insurance sounds like an extreme or unreasonable measure for many people. Not everyone can simply uproot themselves and their family to save money on auto insurance.  However, if the circumstances are right (e.g. work 100% remotely or rent your home) you can significantly reduce your auto insurance premium by 50% or more. For example, a new driver living in Tillsonburg would pay 75% less compared to the same risk profile from the Brampton or Toronto area.