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

Student car insurance across Canada isn’t cheap—especially if you’re under the age of 25. 

The majority of people in this age group are in high school, college or university—and statistically, this group is at the highest risk for car accidents. Because of that, young people pay the highest insurance premiums, on average, of any demographic. In the eyes of insurance companies, young people just haven’t been driving long enough to earn discounts or build up a good driving record.

Luckily for students in some provinces, such as Manitoba and Saskatchewan, public auto insurance doesn’t take age into account when determining premiums. But that’s not the case for the rest of Canada. 

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

Get listed on your parents’ insurance policy

When you first start driving, you don’t have any driving history. You also typically don’t have any insurance history, which can drive up the price of your premiums because you’re seen as a higher risk to insurance companies. The sooner you build your driving and insurance history, the better. 

If you can, 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 will likely drive up the cost of your parents’ insurance, it’ll be a lot cheaper than having your own policy. You’ll also start accumulating a driving history and that’ll help you save money when you eventually leave home and get a policy of your own—as long as you maintain a clean driving history. 

Keep in mind, however, that being listed as a secondary driver only applies if you occasionally drive the car. If you’re the primary driver, then you need your own policy. Lying to your insurance company is a serious offence that may result in your claim being denied, insurance fraud charges and even being denied insurance in the future. 

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

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

If you own a vehicle and already have an insurance policy, keep your insurance or stay on your parents’ insurance so that you can use the car when you’re back for the holidays. This also ensures that you keep a continuous insurance history, which will grant you better premiums in the future. 

Insurance companies look for gaps in insurance history when calculating your insurance rates, and if there are significant gaps in time where you were not insured, then they generally will charge you higher rates.

If you are taking a car with you to school

If you plan on attending school in another province, it may affect your auto insurance. That’s because different provinces and territories have different insurance rules, so you will have to take a few steps to keep your current rate. 

Even if you’re just moving between cities, or from a small town to a big city, take note that urban areas are more expensive than rural areas. For example, your premiums might go up because car thefts in your new neighbourhood are fairly common, or because there are a higher number of claims. 

The good news is you can stay on your parents’ insurance policy as long as your permanent address stays the same. You just have to let your insurance provider know that you’re planning to move because you’ll have a new address for where your car will be parked. This may affect your rates, depending on where you’re parking your car (e.g. on the street, in a private garage, etc.). 

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 start driving your own car, you have to purchase an insurance policy. If you have insurance history from the United States or other countries with similar driving environments to Canada, bring proof of that history to your potential insurance provider or broker for them to review. This might help you secure a cheaper premium. 

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

Ultimately, don't settle for the first insurance company you find on Google. Shop and compare rates to get the best prices and adequate coverage based on your needs.

Ask your broker/insurance company about discounts

When seeking a policy of their own, many students might just sign up with the insurance company trusted by their parents. But it’s best practice to shop around and compare auto insurance rates before you lock into a policy.

There are discounts you could be eligible for, so 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 will provide discounts to full-time students who maintain high grades. 
• Credit score discount. If you’re a student in Quebec and Alberta start building a solid credit history because some insurance companies reward customers for having good credit scores.
• Driving training discount. If you successfully complete a driver training or education program, such as the Young Drivers of Canada program, your auto insurance company might give you a lower rate. 
• Telematics program. When you sign up for telematics, you give permission for your insurance company to monitor your driving habits, usually through a mobile app. Good drivers can get 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 recommended. Check with your insurance company if you’re eligible for a discount. 
• Alumni discount. If you recently graduated from a post-secondary institution, you may be eligible for a preferred rate through your alma mater.