Everything you need to know about car insurance if you're a student

This article has been updated from a previous version.

Car insurance for students in Canada isn’t cheap—especially if you’re under the age of 25. 

Statistically, drivers in this age group are at the highest risk for car accidents. This is why young people pay the highest insurance premiums, on average, of any demographic.

Transport Canada reported that in 2021, the fatal collision rate per 100,000 licensed drivers aged 16-19 rose to 6.5 per cent, marking a 5 per cent increase from the year before. To insurance companies, young drivers are seen to lack the experience necessary to qualify for discounts or build a reliable driving record. 

Luckily for young drivers in some provinces, such as Manitoba and Saskatchewan, public auto insurance rates are set by the provincial government and don’t consider age when determining premiums. But that’s not the case of the rest of Canada.  

The reality is that there’s no single insurance company that consistently offers the cheapest car insurance for students. But you don’t have to wait until you turn 24 to start saving on your auto insurance premiums. So, if you’re headed to school this fall here’s what you need to know to navigate the insurance landscape. 

Read more: How do Manitoba car insurance rates compare to other provinces? 

Get listed on your parents’ insurance policy

As a novice driver, you don’t have any driving history. This means you also won’t have any insurance history, which is a factor that can drive up the price of your premiums and place you in the high-risk category for  insurance companies. The sooner you build your driving and insurance history, the earlier you’ll be able to qualify for better insurance rates.  

One strategic move is to ask your parents to put you on their auto insurance policy as a secondary driver as soon as you have your driver’s licence. Although this might increase the cost of your parents’ insurance, it’ll be a lot cheaper than having your own separate policy. You’ll be able to start building your driving history, which will lead to greater savings when you eventually leave home and get a policy of your own—as long as you maintain a clean driving history! 

It’s important to note that being listed as a secondary driver only applies if you occasionally drive the shared car. If you ever do become the primary driver, you’ll need to get your own insurance policy. Lying to your insurance company is a serious offence that may lead to claim denials, potential insurance fraud charges and even future denial of insurance coverage.  

Also, if it’s not absolutely necessary, consider forgoing buying your own car right away. Remember, if you own a car, then the auto insurance policy registered to that vehicle will need to be in your name. 

Related: How to estimate the cost of insurance before buying a car

If you’re not taking a car with you to school

If you own a car and already have an insurance policy, maintain that insurance coverage or stay on your parents’ insurance, especially if you plan to use the car when you’re back for the holidays. That way, you’ll keep a continuous insurance history, which will grant you better premiums in the future.  

Insurance companies consider gaps in insurance history when calculating your insurance rates. If significant gaps are found where your car remained uninsured, you’ll likely be charged higher rates.

If you're taking a car with you to school

If you’re attending school in another province, be prepared to make potential adjustments to your auto insurance. Provinces and territories in Canada operate under different insurance regulations, so you’ll have to take a few steps to maintain your current insurance rate.

Even if you’re moving within the same province, transitioning from a small town to a big city can increase your insurance premiums, as cities can introduce new risk factors like higher rates of car thefts and collisions, leading to more insurance claims. 

The good news is you can stay on your parents’ insurance policy as long as your permanent address stays the same. All you need to do is contact your insurance provider and update your home address so they know where your car will be parked. This may affect your rates, depending on whether you’re parking your car on the street or in a private driveway or garage. 

If you’re an international student

International students with no driving history or any record of having insurance in Canada are considered new drivers (even if they have driving experience from their home country). 

Once you’re fully licensed in Canada and ready to start driving your own car, you must purchase an insurance policy. If you have insurance history from the United States or other countries with comparable driving environments to Canada, make sure to bring proof of this history to your potential insurance provider or broker for them to consider. This might help you secure a cheaper premium.  

If you're driving a friend or relative's car, they will also have to add you to their insurance policy as a secondary driver.  

Asking your broker/insurance company about discounts

When seeking a policy of your own, you might feel tempted to sign up with your parents’ insurance company. While it may seem more convenient, it’s best practice to shop around and compare auto insurance rates before you lock into a policy of your own. 

There are discounts you could be eligible for, so make sure to ask your broker about the following: 

• Multi-car discount. If you plan to live at home while you’re in school, you have the option to bundle your insurance with your parents’ policy.
• Good student discount. Some auto insurance companies provide discounts to full-time students who maintain high grades. 
• Credit score discount. Students in Quebec and Alberta can benefit from a solid credit history, as certain insurance companies reward customers for having good credit scores.
• Driving training discount. Successfully completing a driver training or education program, such as the Young Drivers of Canada program, may earn you a lower rate from your insurance company. 
• Telematics program. By enrolling in telematics, you give your insurance company permission  to monitor your driving habits, usually through a mobile app. Good drivers can earn discounts of up to 20%.
• Winter tire discount. Installing winter tires can get you a 5% discount in Ontario, where it's mandatory for auto insurance companies to offer this discount to drivers. For other provinces, winter tires are still recommended. Check with your insurer for eligibility. 
• Alumni discount. If you’ve recently graduated from a post-secondary institution, you may qualify for a preferred rate through your alma mater.

Even though students and young drivers pay more in insurance, there are ways to reduce your insurance premium. By exploring discounts, bundling with your parents’ insurance, and driving responsibly, you can save money – not just until you graduate, but well into the future, too.