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What You Should Know About Car Insurance for New Drivers

Shopping for car insurance can feel overwhelming, especially for new and young drivers – or parents insuring a child for the first time. Many share the same questions:

Why is car insurance expensive for new drivers?  What coverage do new drivers need? What can wait? And how can I reduce the cost of my car insurance?

The good news: once you understand the basics, the process becomes much easier to navigate. Here’s what every new driver should know.

Why Car Insurance Often Costs More for New Drivers

Whether you’re a young driver or someone getting licensed later in life, the biggest factor affecting your premium is limited driving history. With less experience on the road, insurers have less information to assess risk.

While premiums can vary, gaining driving experience and maintaining a clean driving record over time may help improve your rates. 

This guide focuses on the decisions you can control today, so you can feel confident in your coverage choices.

The 3 Coverage Decisions Every New Driver Should Understand

1.  Mandatory Car Insurance Coverage in Canada

Every driver in Canada must carry certain core coverages. These requirements may change slightly by province but usually include:

These coverages are required by law because they are designed to protect you, your passengers, and others on the road.

2.  Collision and Comprehensive Coverage: Do You Need Them?

These coverages protect your vehicle if it's damaged.

  • Collision covers damage from hitting another vehicle or object.
  • Comprehensive covers theft, vandalism, fire and weather-related damage.

You might want these coverages if:

  • Your vehicle is newer or expensive to fix
  • You rely on your car daily
  • You want protection from unexpected bills following an accident

You might skip them if:

  • Your vehicle is older or lower in value
  • You’re comfortable paying for repairs yourself 

3.  Deductibles: What Would You Pay Out of Pocket?

Your deductible is the amount you pay if you make a claim.

  • A higher deductible typically means a lower premium
  • A lower deductible typically means a higher premium

Choose an amount that makes sense to your wallet and risk tolerance.

Ways New Drivers Can Save on Car Insurance

Starting good new habits today can help you save tomorrow. Even small decisions add up over time and consistency is key. 

TD Insurance offers a variety of discounts and savings for car insurance, designed specifically for young drivers. We'll ask all the right questions to determine your eligibility and will automatically add these to your policy to ensure you're saving every dollar possible.

  • Complete an approved driver training program. With little or no driving history, new drivers are considered higher risk. Completing an accredited driver training program can improve your road knowledge and confidence, help you ace that next driving test and help lower your car insurance premium.
  • Purchase a vehicle you can own outright: If you finance or lease a vehicle, the leasing or financing contract  will often require you to carry  collision and comprehensive coverage. However, if you own your car outright, you have the option of removing it.  Collision and comprehensive coverages are the most expensive coverages for new drivers, so this choice could help lower the cost of your insurance. Keep in mind that in this scenario, if you're at fault in an accident, and you chose not to carry collision coverage, you would be responsible for repair or replacements yourself. 
  • Choose a vehicle with strong safety ratings. Cars with strong safety ratings or theft deterrent features may cost less to insure. 

Tip: Before purchasing a vehicle, you can use the Insurance Bureau of Canada's( IBC) How Car Measure Up (HCMU) online tool that helps drivers make informed decisions when buying or leasing a vehicle. It analyzes the frequency and cost of insurance claims for Canada's most popular vehicles and provides a ranking to show how each vehicle measures up. 

  • Adjust your deductible to suit your budget. Choosing a higher deductible, enables you to pay less for your car insurance premium, but you should have a claim, you'll have to pay more out of pocket. 
  • Maintain a clean driving record. Develop safe driving habits early on to help manage, and eventually reduce, your premium.
  • Ontario Tip: Full G License. In Ontario, moving to a full G license as soon as you're eligible could help you start benefiting from lower premiums sooner.
  • Sign up for a usage-based insurance program. If you’re a TD Insurance auto policy customer in Ontario or Quebec, you may consider joining TD MyAdvantage. TD MyAdvantage is a usage-based insurance program that records your safe driving behavior with a discount on your auto insurance premiums.  Registering for TD MyAdvantage will also allow you to monitor your driving behavior and help sharpen your skills. However, unsafe driving can result in a premium increase.
  • Bundle your insurance. Bundling means purchasing all your insurance products, like home, auto and recreational vehicle coverage from one insurer. Typically, bundling your car insurance with your home, condo, or tenant insurance can help you save on the cost of your insurance.

Quick Checklist Before Getting a Quote

Gathering the right information ahead of time helps ensure your quote is accurate:

  • Vehicle year, make, model, and VIN
  • Driver’s license details
  • Estimated annual driving distance
  • Any completed and approved driver training programs

Parents Insuring a New Driver: What to Know

Parents often have additional questions when their child gets their license. Here are the essentials:

If your child has only a learner’s permit, you don’t need to add them to your policy just yet. Permit holders are covered while driving with an experienced, supervising driver. This means your child will be automatically covered under the insurance policy of whoever they’re driving with, as long as they follow the conditions of their permit. 

Once they’re fully licensed and legally able to drive with a valid driver's license, they should either:

  • Get their own policy (if they have their own car), or
  • Be added to your policy as a primary or occasional driver.

FAQs

There’s no universal definition. Many insurers consider ages 16–24 as new drivers, but others look at number of years licensed, depending on the province. Premiums tend to reflect limited experience and tend to decrease with time and with a clean record. 

Not always, but it’s strongly recommended. Driver training can improve skills, boost confidence, and often reduce insurance costs for many new drivers.

If they own or lease their own vehicle, they’ll need their own policy. If they’re driving a family vehicle, they should be added to your policy as a primary or occasional driver, based on usage and household vehicle count.

It depends on:

  • Age and driving experience
  • Province
  • Vehicle type
  • Coverage choices

Adding a young driver to your policy is often more cost efficient than having them start their own policy right away. Discounts, specifically designed for students living away from home, may also apply:  

  • Occasional Driver Discount (Ontario, Alberta)
  • Student Away Discount (Nova Scotia, New Brunswick)
  • Student Discount (Newfoundland, Prince Edward Island)

You won’t necessarily pay the same as a 16 year old, but premiums still reflect limited experience. With time and a clean driving record, your rate should improve. Because there are so many factors that affect premiums, including the province you live in, your safest bet is to do your research.

When you purchase car insurance with TD Insurance, you're getting more than the minimum auto insurance coverage; you're getting coverage that fits your needs, the ability to manage your policy online, access to licensed Advisors over the phone, or through secure chat, and flexible payment options.

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The content on this page is for general information purposes only and does not constitute legal advice. Coverages described herein may be subject to additional eligibility criteria, limitations and exclusions. In the event you make a claim, potential indemnification is also subject to the receivability of the claim and the type of coverage you bought.

In the case of conflict between the content on this page and your policy wordings, your policy wordings shall take precedence. Please speak to an Advisor or consult your policy wordings for further details.