When teenagers reach the age where they’re able to drive themselves around, it gives parents a newfound sense of freedom. As a parent, you no longer have to be on your son or daughter’s schedule to pick them up from school, work, or wherever they may be. However, now that they are able to drive on their own, as a parent, you have a new responsibility, which is to ensure that your young driver has been properly educated before they get on the road. What’s the first step in ensuring they’re well equipped as they become a new driver? To teach them everything they need to know about auto insurance.
For most people, particularly young drivers, auto insurance is something that is overlooked. It’s costly and many people think they won’t end up needing it. The reality, however, is that auto insurance is required by law in Ontario, and even though you may not use it, it’s an investment that will protect yourself from the unexpected. In fact, for drivers that don’t carry valid auto insurance in Ontario, fines can range anywhere from $5,000 to $50,000. What’s more is that if a driver is found without carrying auto insurance, they can have their license suspended and their vehicle impounded and that’s more costly than not having insurance at all.
In many cases, a young driver’s first car is handed down in the family and insured in their parent’s or grandparent’s name. A new driver might also purchase their own first car and have parents chip in for the insurance. In other cases, a young driver might purchase their own car and pay for the insurance entirely on their own. Regardless of who pays for the auto insurance, new drivers should understand the factors that influence auto insurance rates.
What New Drivers Need to Know About Auto Insurance
Unfortunately, the price of auto insurance isn’t going down anytime soon but there are many things new drivers can do to lower their rates. Here are 9 things new drivers should consider when choosing an auto insurance policy.
1. Go to Driving School
One of the main ways a new driver can receive a low insurance rate is to take a drivers education course. Completing this course can help you reduce your premiums if it’s recognized by your provider which will not only save you money, but it will also prepare you to become a better driver, which is a double win.
2. Speak to an Expert
Talking to an expert will help you get the best insurance rate and the right coverage for your needs. An insurance broker can offer personal service for every driver as they will know about your family circumstances and when they have changed so you get customized rates. Say a new driver moves, for example. A broker will be aware of the change, unlike a representative at a call center. With a broker, you get what you need for your lifestyle.
3. Get Discounts Through the Graduated Licensing System
It’s required that new drivers complete various stages of the licensing system in Ontario, including G1, G2, and G levels. You can ask your insurance company about discounts that may be available as you graduate each of these stages.
4. Remain Loyal to Your Insurer
Staying with one insurer for an extended period of time can sometimes result in a long-term policyholder discount. When a driver is loyal to an insurance company, it’s likely that they will offer you benefits and discounted rates.
Although many insurance companies offer appealing benefits for customers that have remained loyal over time, it’s important to keep shopping around. These benefits or lower rates look attractive at first, but they may not be the best option for you. Staying with insurance companies to receive loyalty discounts can feel like the safest option, but there may be better rates for you with another company. The only way you can be sure is to shop around every so often to find the best rate over time.
5. Keep Your Driving Record Clean
Accidents stay on your driving record for several years which is why it’s the first thing that insurance companies use to determine a drivers’ rate. The longer the driver is accident-free, the better their driving record becomes, which in turn, helps their insurance rates go down. Put simply, if you avoid infractions, your insurance premiums will drop.
6. Consider Usage-Based Insurance
Many insurance companies are now offering better rates for drivers who are able to present a clean driving history in a shorter period of time. This is done through Telematics technology, or pay-as-you-drive, which is able to track a driver’s habits through a USB. It customizes insurance to an individual’s pattern of driving. It can measure the distance one drives, the time of day they’re on the road, and how a driver accelerates or uses the brake. If you maintain good driving habits, you can reduce your insurance rates with usage-based insurance.
7. Maintain Good Credit
Maintaining a good credit history can also reduce your insurance costs. Many insurance companies evaluate a driver’s credit history before they price auto insurance policies. Good credit often amounts to better insurance rates.
8. Increase Your Deductible
A deductible is an amount you pay before your insurance company covers any expenses related to a claim. Higher deductibles typically mean lower premiums. Although it may seem difficult to increase your deductible at first, it can be a good way to lower your rate in the long run.
9. Consider What Kind of Car You Drive
What many young drivers don’t know is that the type of car you drive can either raise or lower your rates. For this reason, it’s important to know the exact rates of different vehicles you’re considering before making a big purchase.
Many parents start off their new driver by insuring them as a secondary driver without teaching them the basics of auto insurance. When they’re eventually removed as a secondary driver, they won’t know where to start when shopping for the best auto insurance rate. These considerations will help new drivers understand the basics auto insurance so they can make an informed decision.
Aaxel Insurance is a dedicated group of Insurance brokers that care about the current and future needs of young drivers. Call us at 905-362-8080 and let us help you get the insurance you need as a new driver.