Car insurance for young people – A young driver presents a risk-assessed at 5 times that of an adult!
The first scenario that comes to mind — arguably the most common — is that of the boy or girl using the family car. “The parents and owners of the vehicle must call their insurer to add the name of their son or daughter to the insurance policy as an occasional driver,” explains Christian Duval, sales director for the insurance company Groupe. Promutual. His colleague Luc Boissière, director of actuarial services, adds that this “will increase the premium by a certain percentage, depending, among other things, on the classification of the vehicle”. Buying a used car, therefore, makes more sense. What about a kitten though?
The second scenario — less probable but possible — is that the young driver has the means to buy a vehicle. Here, things get a little complicated. Remember that auto insurance, like any form of insurance, is based on risk assessment. However, the higher the risk, the higher the insurance premium will be.
“All categories combined and without taking age into account, it is estimated that the risk for a driver of being responsible for an accident is 1 in 25, underlines Christian Duval. On the other hand, in young people under 18, this risk is 1 in 5 for boys and 1 in 10 for girls. These figures alone explain why insurance premiums are higher for young drivers.
Minute or bolide
If the young driver wants to own his vehicle, what type of vehicles should he turn to? A new or used vehicle? A kitty or a racing car?“The insurance premium varies according to the type of vehicle, explains Christian Duval. High-performance vehicles, such as large displacement vehicles, sporty vehicles, vehicles whose brand is very popular with thieves, all cost more to insure. According to Luc Boissière, the equation between a young inexperienced driver and a car
of this category is nonsense. “This young driver is going to pay a fortune in insurance.”
It should be remembered that in Quebec bodily injury caused by a car accident is compensated by the Société d’assurance automobile du Québec. Private auto insurance only covers material damage, and it is no-fault, which means that each insurer compensates its client when an accident occurs.
Private auto insurance in Quebec usually includes three coverages. The first, which is mandatory for all drivers in Quebec, is liability insurance worth at least $50,000. “This insurance covers the material damage that your vehicle could cause to the property of others, specifies Christian Duval, for example, if you hit a post or if you drive through a fence.” The second is the collision insurance, which protects the vehicle from damage caused during a collision. The third is insurance that covers damage caused when there is no collision. This is the insurance that protects against theft, fire, broken window, etc.
So back to minute. “Collision insurance accounts for about two-thirds of the insurance premium,” explains Luc Boissière. If a young person buys a minute, he could save money, insofar as he accepts the risk that, if he is responsible for an accident, he will have no compensation. On the other hand, if he is not responsible for the accident, he may be compensated under liability insurance.
In the case of the purchase of a higher quality used vehicle, it is the value of the vehicle that will be used to establish whether or not collision insurance is advantageous for the owner.“In addition, underlines Christian Duval, when there is a lender, as a general rule, the latter will require collision insurance.
The first piece of advice that MM. Duval and Boissière give young drivers are this: take your time. “The insurance premium takes into account the driver’s experience as well as his track record on the road,” explains Luc Boissière. Before buying a vehicle and taking out their car insurance, a young person can accumulate a few years of experience by driving the family car. Each year spent without an accident will go to his file and, when he takes out his first insurance policy, this experience will also be reflected in the premium to be paid.
Second advice: it is better to contact an insurer before buying a car.“As the classification of the vehicles counts in the premium, it is preferable to know it before deciding if it is indeed this vehicle that one wants to buy, adds Christian Duval. There is no point in buying a vehicle if the premium to be paid exceeds the available budget.”
Young drivers are also advised to take a driving course. “We consider the driving course as a driving experience, which lowers the premium,” emphasizes Luc Boissière. For example, here at Promutuel, we offer a 10% discount to young drivers who have taken a driving course.”
Another important point: always shop around for your insurer. “The gap between insurers is very real and sometimes surprising, specifies Luc Boissière. Insurance for the same vehicle, under the same conditions, can cost $2,000 from one insurer and $6,000 from another. We have an interest in comparing. In addition, some insurers, such as Groupe Promutuel, are particularly interested in the segment of young drivers. “We are used to serving this clientele, and that is why we offer a 10% discount to CEGEP and university students.”
The last piece of advice concerns all drivers, young and old. “The insurance premium you pay takes into account your driving experience, whether good or bad and regardless of age,” emphasizes Christian Duval. Driving carefully to avoid accidents remains the best way to see the insurance premium go down.
