Car Insurance for G2 Drivers: A 2024 Guide
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Discover the methodologyYou’ve got your G2 driver's licence in hand, empty roads in front of you and you’re ready to hit the road. Then you remember that you’ve not thought about getting car insurance.
But where to start? You’ve heard rumours that car insurance for G2 drivers is usually more expensive than normal. You’ve also heard that you have to have a certain amount of coverage before getting on the road and that maybe you can get some form of discount on your premiums. All this is true.
This article covers all the basics surrounding car insurance for G2 drivers and what you can do to find the best insurance quote before hitting the tarmac.
Car Insurance for G2 Drivers: 5 Key Takeaways
- Is between 30%-50% more expensive than for G licence holders
- Premiums can be reduced by taking driver courses, installing specific mobile applications and having a clean record
- Being listed as a secondary driver on an existing policy is significantly cheaper than being a primary driver on a new policy
- Car insurance is mandatory for G2 drivers
- The simplest way to find cheap car insurance as a G2 driver is to use a comparison site
What is car insurance for G2 drivers?
Car insurance for G2 drivers in Ontario is the same as normal car insurance for drivers with a full G licence. While the amount of coverage differs between policies, you, the insured G2 driver, will be protected from financial repercussions in the event of an accident.
Depending on the level of insurance on the policy that you buy, you may be covered for costs related solely to third-party liability, which is where the insurance will pay for property damage and medical expenses to others but not you, or have a more comprehensive coverage that includes you and your property, as well.
However, due to the cost of car insurance for G2 drivers, it is more common than not to only have a third-party liability policy in place.
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Is car insurance for G2 drivers mandatory?
Yes, car insurance for G2 drivers in Ontario is mandatory. If G2 drivers are caught without any proper insurance they will likely face large fines, potential licence suspension and have their vehicle impounded.
It is, therefore, vital that all new G2 drivers acquire some form of car insurance before getting out on the road. There are two main ways G2 drivers can be insured. These include:
- Listed as a secondary driver on a parent or guardian's policy: This is often the most affordable option, especially if the parent or guardian has a clean driving record.
- Getting their car insurance policy: G2 drivers are legally independent and can, therefore, get their insurance coverage which provides more freedom and flexibility. The downside is that being listed as a primary driver on a new car will come with a higher premium.
Good to know
Adding a G2 driver onto an existing car insurance policy as an additional or secondary driver is a great way to build their insurance history. Even if the G2 driver doesn’t drive the car at all, if you can afford the payments you should consider adding them on.
When the G2 driver eventually graduates to a full G licence, providing a letter of experience with a clean car insurance record to insurance providers may reduce future premiums.
What does G2 car insurance coverage have to cover?
By law, G2 drivers in Ontario must have third-party liability car insurance coverage with a $200,000 limit, accident benefits coverage, direct compensation - property damage (DC-PD) cover and uninsured automobile coverage. This list of coverage is a requirement for all drivers in Ontario and not specific to just G2 licence holders.
While it may seem like a lot, do not fret. A standard auto insurance policy in Ontario will include all the mandatory coverage required and a breakdown of what is covered can be seen in the table below.
| Ontario Mandatory G2 Car Insurance | Details of Coverage |
|---|---|
| Third-party liability coverage | This mandatory coverage will provide the policyholder with compensation if they are injured or killed in a hit-and-run event, or by an uninsured driver. The coverage also extends to property damage caused by an uninsured, yet identified, driver. |
| Accident benefits coverage | Third-party liability protects the driver if they kill or injure another person, or cause property damage to a third party. The minimum limit of $200,000 will pay for claims made against the driver resulting from the accident, but will not cover the driver themselves or their property. |
| Direct compensation – Property damage (DC-PD) coverage* | DC-PD provides coverage for any damage caused to your vehicle and its contents if another individual caused the accident. DC-PD allows you to claim reparations directly from your insurance provider who subsequently seek compensation from the individual at fault, saving you the hassle. |
| Uninsured automobile coverage | This mandatory coverage will provide the policyholder with compensation if they are injured or killed in a hit-and-run event, or by an uninsured driver. The coverage also extends to property damage caused by an uninsured, yet identified, driver. |
Watch out!
*Coverage under DC-PD only applies if the following three criteria are met:
- The location of the accident is in Ontario
- At least one other vehicle is involved
- One of the other vehicles involved is also insured by an Ontario-licensed insurance company; or, has an agreement with FSRA that extends its coverage
You can explore coverage from the best car insurance companies in Canada right here. Get free quotes and start saving now.
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Additional car insurance for G2 drivers
Outside of the mandatory car insurance for G2 drivers, other policies do exist that provide more substantial coverage. These include:
- Collision and upset coverage: This additional insurance pays for any damage to the insured vehicle if it is in a collision with another car, or hits a random object like street signs or fire hydrants. The upset part of the add-on provides coverage if the insured vehicle rolls over (is upset).
- Specified perils coverage: This coverage protects the insured vehicle from specific losses from theft, fire, earthquake, explosion or weather-related damages.
- Comprehensive coverage: Comprehensive insurance ensures that your car is covered in the event of non-collision damages and protects the vehicle even while it’s not driven. The coverage includes specified perils in addition to hitting animals, vandalism, flying or falling objects and cracked windshields.
- All perils coverage: This policy is perfect for individuals with a low-risk tolerance as it combines all optional car insurance, providing near-complete coverage.
How much does auto insurance cost for G2 Drivers in Ontario?
The average car insurance for G2 drivers in Ontario ranges from $1,500 to $5,400 per year. Of course, the exact premium depends on numerous factors including:
- Age
- Gender
- How long you’ve been licensed
- If you’ve completed extra driver’s awareness courses
- Estimated driving distance per year
- Your postcode
- Where the car will be parked overnight
- The car make, model and age
- Additional coverage
- Primary use of the vehicle
- Any previous suspensions, accidents or traffic violations committed by the policyholder
The exact cost of car insurance for a G2 driver in Ontario
In this example we have a 23-year-old male driver living in Ontario, with basic mandatory coverage, no prior traffic violations, driving a 2020 Honda Accord Ex 4DR no more than 10,000km/year and who has completed a driver education course.
The G2 car insurance premium for this individual ranged from $197.83/month ($2,374/year) offered by Economical Insurance to $448.00/month ($5,376/year) with Travelers Essential.
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Why does car insurance cost more for G2 drivers?
Car insurance for G2 driver licence holders is often between 30%-50% more expensive than for G driver licence holders and the main reason is due to their limited driving experience. This lack of experience leads insurance underwriters to believe that G2 drivers are higher risk clients which comes with a higher claim ratio.
Additionally, statistics have found that younger drivers are more likely to get distracted while driving which further leads to an increase in accidents. The increased premium, therefore, offsets the increased risk to insurers.
Of course, while there are factors for G2 drivers that increase their insurance premiums there are also steps that can be taken to demonstrate responsibility and subsequently lower insurance costs.
How can I get cheap car insurance as a G2 driver in Ontario?
The cheapest car insurance for G2 drivers in Ontario is offered by YouSet, Economical Insurance, Intact Insurance and CAA Insurance; however, the actual prices will vary depending on your specific personal details and the factors outlined previously in this article.
The best way for Ontario G2 drivers to get cheap car insurance is, therefore, by shopping around and comparing multiple quotes from different providers. Online car insurance comparison tools like the one below simplify the process and help seekers find the best deal for them.
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Car insurance discounts for G2 drivers in Ontario
Fortunately, it’s not all doom and gloom. While G2 drivers do have to accept that they will pay a higher car insurance premium than their G licence-holding peers, G2 drivers can take steps to reduce their insurance costs. They can:
- Take an approved Ministry of Transport (MTO) driving course: Completing an MTO-certified beginner’s driver education course not only gives inexperienced drivers essential skills but can also reduce G2 driver premium rates.
- Maintain a clean driving record: While you won’t have much car insurance history to start, avoiding traffic violations and accidents will show insurance providers that you are a safe driver with a lower risk for accidents.
- Agree to install a mobile application on the phone: Installing specific applications on a mobile phone that monitor driving habits is one of the easiest ways to get a significant reduction in premium rates as a G2 driver. While only some insurers provide this option, it can be a great way to prove that the policyholder is cautious behind the wheel.
- Have Canadian Automobile Association (CAA) membership: This discount is limited to those who take out insurance through CAA, but a membership with the association may reduce premiums up to 20%.
