Car insurance in Ontario is proving to be a financial burden for young drivers, with some paying as much as $4,000 more per year compared to older drivers. According to Daniel Ivans, an expert at Rates.ca, young drivers, particularly those under 25, face steep premiums due to higher risk factors.
Insurance premiums are based on risk assessments, and younger drivers, especially males, are statistically more likely to be involved in accidents or file costly claims. “Insurance is based on past behavior,” Ivans explained. “New drivers tend to have more accidents, so insurers charge more to cover the potential risks.”
By the time drivers reach their mid-30s, their driving habits usually improve, and claim rates drop, which is why premiums tend to stabilize around that age.
Gender is another factor that impacts premiums. Young men typically pay more than young women due to higher and costlier claims. “If you take 100 young men and 100 young women, you’ll find that men generally have more accidents and more expensive claims,” Ivans added.
However, there are ways for young drivers to lower their insurance costs:
Take an Approved Driver’s Training Course: Completing a certified course can count as up to three years of driving experience, helping to reduce premiums.
Join a Usage-Based Insurance Program: Programs that track driving habits through mobile apps can offer savings of up to 30% for safe drivers.
Get Added to a Parent’s Insurance Policy: This can unlock multi-vehicle or multi-line discounts.
Although car insurance premiums may seem unfair to safe young drivers, they are based on statistical data and past claims, rather than individual driving records. The best advice for young drivers is to shop around and seek out available discounts, as different insurers assess risk in various ways.
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