Does insurance go down when you get your G licence?

Getting your driver’s licence is a rite of passage for many young Ontarians. Being able to drive yourself to festivals, camping trips, and perhaps even the odd date can provide a new sense of freedom and excitement.

But driving comes with some obligations, including the need to be added to an Ontario auto insurance policy. And one of the first things a new driver will notice is that insurance premiums for inexperienced drivers can be expensive.

But have no fear, those high premiums will decrease as you gain more experience and demonstrate that you’re a safe and law-abiding driver. In this post, we will explore how premiums are affected by progressing through the licensing process.

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Your G Licence & Insurance: Frequently Asked Questions


What is a G licence in Ontario?

A G licence in Ontario represents the full licensing requirements for any car, van or small truck. It also allows drivers to tow reasonably sized trailers and RVs. Drivers who hold a G licence can drive on any road or highway at any time of day, with any number of passengers, up to the legal capacity of the vehicle.


What are the benefits of a full G Licence?

The graduated licensing program in Ontario is designed to step inexperienced drivers through the process of learning how to drive, safely and confidently.

First-time drivers begin by taking a simple eye test and a written test demonstrating that they understand traffic signs, stoplights and basic rules of the road. Once they pass, they are granted a G1 licence.

A G1 licence allows newbie drivers to practice their driving skills under the direction of a fully licensed individual with more than four years of driving experience who is positioned next to them in the front passenger seat. This supervising individual cannot be under the influence of drugs or alcohol. G1 drivers are not allowed on 400 series highways or other high-speed roadways and are not permitted to drive between the period of midnight and 5:00 am.

After 12 months, or eight months if they graduate from an approved driving school, G1 drivers can take a road test to demonstrate their newfound driving abilities and once they pass, they will graduate to a G2 licence.

A G2 licensed driver can now drive without supervision, but they do have to follow a number of rules, including a blood alcohol reading of zero. For drivers under 20 years old, during the first six months after graduating to a G2 licence, only one passenger under the age of 19 is allowed in the vehicle. After six months, the G2 driver can have three passengers under the age of 19.


Who can apply for a full G Driver’s Licence?

After 12 months of G2 training, the driver can graduate to a full G licence by taking a G2 exit road test. This test covers more advanced skills than the driving test needed to graduate to a G2 licence and includes highway merges, parallel parking, lane changes and other maneuvers drivers regularly need to master in order to navigate safely.

If the G2 driver successfully passes the G2 exit test, they will be granted a G licence with full driving privileges. They will no longer be limited to certain highways; they can carry passengers of all ages and will now simply have to follow the same rules of the road as all other fully licensed drivers.

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How can a G Licence help lower your car insurance rates?

Insurance premiums are based on several factors, including the cost to replace or repair a vehicle, the driving history of all the drivers listed on the policy and where they live. Driving history includes traffic tickets and infractions under the Highway Safety Act and any at-fault accidents that the driver has experienced. Notably for this topic, how long a driver has been licensed also plays a role.

It’s an unfortunate truth that inexperienced drivers are involved in more accidents than experienced ones. Age is also a huge factor. In fact, accidents involving teenage boys account for 25% of all motor vehicle accident deaths and serious injuries, which is 3 times more than the rate among those 35-44 years old. The most difficult period to be driver in Ontario is the year after they receive their G licence. Experts point to two main factors for this discrepancy: immaturity and inexperience.

Insurance companies have first-hand experience with these trends, paying a disproportionate number of claims for inexperienced and young drivers. It only makes sense then, that they charge these drivers more for their insurance, to pay for the increase in claims activity.

That said, the Ontario graduated licensing program is designed to help with both the immaturity levels of drivers as well as driving experience. Graduates of the program have been walked through the driver education process over at least two years, giving young drivers the time to mature as they learn the rules of the road. G1 and G2 drivers are also limited to what driving activities they can participate in until they master basic skills.

This has resulted in a reduction in insurance premiums for many young drivers in Ontario compared to the previous system.

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How much can I save on auto insurance with a Graduated (G) Licence?

Most drivers will see a premium decrease on their policy when they graduate from their G2 licence to a full G licence. This premium reduction is about 10% of their premium, which can represent fairly substantial savings for younger drivers.

How much can I save on my auto insurance policy while holding a full G Licence?

While some may be disappointed that their premium doesn’t decrease by more than 10%, the good news is that each year of clean driving experience reduces the premium by more. Once the driver has 4-5 years of experience, their premium will be reduced to reflect their improved driving abilities, assuming they follow the rules of the road and don’t experience an at-fault accident during this time.

While inexperienced drivers may feel the pain of high insurance premiums when they first set out driving a vehicle, their insurance does go down when they get a G licence and continues to decrease as they gain experience.

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