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It's Covered

Sex, age and auto insurance Add to ...

It should come as no surprise but young drivers are more likely to have accidents - a fact confirmed by Aviva Canada Inc., a leading auto insurance provider.

While graduated licensing programs have been implemented in every Canadian province, Aviva Canada's insurance claims data shows a 41 per cent higher rate of claims among young and new drivers.

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"When you combine a less experienced driver with someone who is also more susceptible to taking risks, as a higher percentage of young people are, the result is more collisions," said Mauro Convertini, Aviva's vice president of auto claims.

While Aviva makes no mention about which sex causes the highest number of collisions, you may not be surprised to know that insurance is possibly the only industry still getting away with rate stereotyping.

Both men and women under the age of 25 are hit the hardest - paying hundreds, even thousands of dollars more for their car insurance. On average, male drivers can pay anywhere from $500 to $2,500 more than their female counterparts.

Not only is this rate based on age but on the probability of the new driver having an accident. Personally, I believe that a driver should be charged based on his or her record, and if the driver get tickets or has accidents then the rate should be increased accordingly. Otherwise, it's all a big money grab.

Those of you who have yet to experience the joys of teenage drivers are paying, on average, $1,200 per year. Adding a new driver to your policy can increase your rate instantly to more than $5,000.

What Aviva's report doesn't reveal is what drivers can do to prevent their insurance rate from sky-rocketing in the event of an accident.

How much does that new car cost?

Use Globe Drive's New Car Search to find car prices, features, specs and more.

Here are five things you should consider:

1) THE BEST-PRICED COMPANY: Don't assume that your insurance company will also be the best rated for your teenager. Do three online rate searches.

Search for the lowest-rated company for yourself, do a separate search for your child, and a final comparison of you and your child insured together. Also, ensure your child is driving and insured on the least expensive vehicle. If your insurance company wants him or her to be rated on your most expensive vehicle, you should consider changing companies or adding an excluded driver endorsement as a solution.

It's also a good idea to have your children drive your vehicle as little as possible, because if they have an accident driving your car it's considered your accident, not theirs. Interesting, eh?

From the three rate comparisons, choose the combination that will cost you the least. The advantage to you being insured separately from your child is that his or her tickets and accidents will not affect your rate.

2) GET CLAIMS PROTECTION: If you don't have an accident on you record, ask if one of the top three insurance companies quoted offers Claims Protection. If it does, get it. This will protect your rate from increasing as a result of an accident. It usually costs somewhere between $35 and $65 dollars and it's akin to buying insurance for your insurance.

Be wary if the company says it offers Accident Forgiveness. This is not the same. Accident Forgiveness usually means that when you have an accident your insurance company will forgive you by continuing to insure you, but your rate will still go up. If you're not paying an additional premium, you don't have Claims Protection.

3) DRIVE A SMASH-AND-DENT VEHICLE: If your car is older there may be little advantage to paying the extra cost of Collision and Comprehensive coverage.

An accident can result in a young driver's rate topping $8,000 for six long years. Interestingly, Aviva also reported that the average claim cost for a young or new driver was $8,661. This being the case, ultimately you would end up paying less if you were self-insured.

In many cases, the rate increase you would pay could buy another similar car, so you may want to consider getting a car that is of little concern if your kid wrecks it.

If the new driver doesn't have Collision coverage, there's no accident to report, no rate increase, and no black mark on his or her driver's record. Many accidents also include a ticket but it would be highly unlikely for the insurance company to find out about it - and in a perfect world, the new driver can ride out the three years until the ticket falls off the insurance company's radar.

4) TAKE DRIVER'S TRAINING: Simply put, driver's training gives you a substantial rate decrease for three years.

Example: male age 21, clean, G2 licensed



No Driver Training

Driver Training

Savings

Occasional

$2,348

$1,710

$638

Principal

$8,719

$7,693

$1,026

Further, Aviva's data showed that new drivers who received certified driver education are involved in 26 per cent fewer accidents in the three years following training.

The cost of a driver's ed course should pay for itself in the discounts given back to you by your insurance company.

5) NO DRINKING: Aviva reported that 40 per cent of young drivers who are killed in road crashes have been drinking - most often on a Friday (52 per cent) and least often on a Sunday.

 

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