Car Insurance For First-Time Drivers Over 40

While many people consider getting a driver’s license a rite of passage for teenagers, tens of thousands of older drivers take to the roads for the first time every year in Canada who need car insurance for first-time drivers over 40.

Many of these older first-time drivers are new arrivals to Canada who may have driven vehicles in their home country and now need to apply for a provincial license. Still, others may have never needed a driver’s license previously, but due to changes in lifestyle, living arrangements or new responsibilities, they need to learn how to drive.

Obtaining car insurance for first-time drivers over 40 isn’t difficult, but it’s important to understand what coverage you require and how you can reduce your auto insurance premium.

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Frequently Asked Questions

When it comes to car insurance for first-time drivers over 40, what coverage is best?

In Ontario and Alberta, every car must be protected by standard mandatory minimum insurance coverage.  This mandatory insurance includes four categories:

Accident benefits coverage – This protects you and your passengers if you are injured or killed in an accident. Accident benefits pay for medical costs not covered by OHIP, including rehab, physio, attendant care, and other expenses. There is also some loss of income coverage if the injured person cannot work.

Direct compensation – property damage coverage – This pays to repair or replace your vehicle and its contents if you’re involved in an accident caused by someone else. Claims under this coverage are paid by your insurer. There are several limitations to this coverage that you can read about here.

Uninsured automobile coverage – This protection applies if you or a family member were injured or killed by a hit and run driver or a driver who doesn’t have insurance. It also pays to repair or replace your vehicle if it was damaged by a known uninsured driver (not a hit-and-run).

Third-party liability – This coverage pays if you are sued for an auto accident. It covers claims if you or a driver of your vehicle injures or kills someone who was not in your vehicle. It also pays if you damage a third party’s property, such as a fence, bicycle or utility pole.

You may also want to consider adding some optional coverage, including:

Collision and upset – The mandatory coverages do not include damage to your vehicle if the accident is your fault. This pays for any damage caused to your vehicle by an at-fault accident with one or more vehicles. It also steps in for single car crashes, such as finding yourself in a ditch or if you back into a utility pole.

Comprehensive coverage – While exceptions include animals that hit your vehicle while driving, comprehensive insurance generally protects you when your vehicle is stationary. This includes vehicle theft, vandalism, and falling or flying items such as a tree limb or a thrown baseball bat.

The insurance coverage best for first-time drivers is a package of standard and optional coverages that best suit your needs. An insurance professional can help you choose which protections to include and set your coverage limits and deductibles.

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Does age really impact your car insurance policies?

Insurance companies determine their rates based on decades of statistics and data on millions of drivers and the accidents they have experienced. All this data has confirmed one inarguable fact: younger drivers have more accidents than older drivers. The Traffic Injury Research Foundation reports that young drivers have an accident fatality rate that is three times higher than the rate among 35­ to 44-year-olds, and their injury rate is double that of the same group.

These higher numbers are primarily due to inexperience, but factors such as youthful recklessness and peer pressure are thought to play important roles.

Thankfully, first-time drivers over 40 don’t have the peer pressure and inherent recklessness that younger drivers experience. This can be seen in the average premiums for new drivers of different ages. An 18-year-old newly licensed male can expect to pay an average of $600 monthly for their insurance in Ontario. In comparison, a newly licensed 40-year-old male will only pay about $300 each month, or almost half the premium. Females can expect to pay about 30% less than males at age 18, while the rates between male and female drivers tend to become equal by age 40.

If you ask whether age impacts your car insurance policies, it most definitely does, with older drivers paying considerably less than their younger counterparts.

How can I get cheaper car insurance as a first-time driver over 40?

While mature new drivers may pay much less than their younger counterparts, the average premiums for the older newly licensed group still represent thousands of dollars in annual expense. It makes sense to explore ways to get cheaper car insurance.

In addition to the many standard discounts available to all drivers, two main discounts can offer newly licensed older drivers significant savings on their premiums.

Driver’s education – In addition to the value of taking a course that provides classroom and in-vehicle training, drivers who complete a provincially recognized driver training course can save as much as 10 to 30 percent on their car insurance. This savings is roughly equivalent to 3 years of safe driving experience.

Letter of experience – Drivers who have driving experience in another country can sometimes use that experience to reduce their premiums. To qualify, the driver needs to arrange for a letter of experience from your previous insurance provider. A letter that outlines your years of driving experience and shows that your claims history with that company was satisfactory might mean that your new insurer treats you as an experienced driver rather than a new one. This can dramatically reduce your premium.

Unfortunately, a letter of experience only applies when a driver is coming from a country with “like” driving conditions, like the United States. If you’re not used to driving in snow and the rules of the road and driving practices are different, you probably won’t be able to get a letter of experience discount.

Why is new driver insurance more expensive?

We outlined above why young drivers pay higher rates, but why is new driver insurance more expensive?

The answer comes down to experience. Insurance data confirms that the first year of being licensed are the most dangerous, regardless of the age of the driver. Accident rates then reduce fairly consistently each year for about five years before they align with the rates of more experienced drivers.

During this more dangerous period, new drivers are still new to many driving situations and are not yet used to reacting when something unexpected occurs, which can result in an accident. Advanced driving wisdom only comes with experience.

Does credit score affect car insurance for first-time drivers over 40?

While some data shows a correlation between credit score and auto insurance claims activity, the industry has been hesitant to incorporate its use in rating and underwriting policies.

In Ontario, insurers are not permitted to request credit reports or scores for auto policies. While in Alberta, auto insurers are only permitted to pull a credit report if the policyholder has applied for a premium payment plan.

Learn more about if and how credit scores are used for home and auto insurance in Alberta and Ontario.

Getting your license can be exciting at any age. For older drivers, understanding what insurance you need and how to reduce your annual premium is a great first step to enjoying a lifetime of driving.

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