Insuring Young Drivers: How Graduated Licensing Works With Car Insurance

Every province in Canada has adopted what is known as a graduated licensing system.  These systems are designed to ease new drivers into the required skills and the responsibilities of having a full driver's license.  If you've got a new driver in your house, you might be a little confused as to how graduated licensing affects your insurance - and your rates.  Although each province's driver licensing system is a little different, there are some similarities when it comes to insurance.

Driving With a Learner's Permit.  The learner's permit is known by different names in different provinces.  In Ontario the learner's is known as a G1.  In other provinces it may be an L class or a Class 7 license.  All of these licenses, regardless of what they are called, mean basically the same thing.  Driving is permitted in accordance with a set of rules, one of which is that a licensed driver is always in the passenger seat of the car while the learner is behind the wheel.  When your new driver obtains a learner's permit, you don't have to add that person to your car insurance just yet.  Insurance companies will automatically cover a driver with a permit, as long as they are following all of the restrictions of the license.

Novice Drivers.  Again, it varies from province to province, but most have one or two novice stages to the graduated license.  This means that the driver has passed a road test and graduated to the next level.  There are fewer restrictions, but it is still not a full license.  When a new driver passes that road test, it's time to add the driver to your insurance.  Young drivers can be pricey to insure, so they are almost always best kept on the policy of a parent or guardian.  This allows the new driver to take advantage of your discounts and history with the insurance company.  If you're having some sticker shock though, it might be a good time to shop around.  An insurance broker from a firm like Idris Insurance Brokers Ltd in your province can help you to compare rates and find the right policy for you and your new driver.

Full License.  In some provinces, a second road test is required to obtain a full license, while in others the graduation happens automatically after a certain time period passes with a clean driving record.  Once the driver has a full license, restrictions are lifted - but rates may still be high.  Any fully licensed driver can take out their own insurance policy, but it's usually best that they stay on your policy until they get a little more experience or move out of your home permanently.  Even students going to university away from home can stay on your policy as long as the meet the requirements set out by the insurance company.  After some time with a clean driving record, a new driver's rates will become lower.