For families with teenagers learning to drive, car insurance doesn't have to be confusing - and it shouldn't send you to the poorhouse either. Here are some ways to make sure you are getting the best coverage for your teen at the right time and at the best price.

When should you insure your teenage driver?

When your teen walks in the door with that learner's permit in hand, don't immediately see dollar signs floating out behind them. If your child has their first level of driver's licence (G1 in Ontario and Class 7 in other provinces), they are required to have a licensed driver in the car with them at all times. Since they are under constant supervision when behind the wheel, insurance companies often consider their risk of accident to be relatively small. As a result, insurers often do not "rate", or charge if you will, for drivers who only have their first level licence. Even so, based on your original agreement with your insurer, you still have a responsibility to notify them there is now a Learner's/G1 licensed driver in the household.

You'll have to contact your insurer again, as soon as your teen is licensed to drive on their own (G2 in Ontario and Class 5 in other provinces), to arrange for coverage for your teen and have them listed on your policy.

Factors affecting a teen's insurance rate

One of the things that will affect your rate the most is if your teen has completed an approved driver-training course. New drivers can receive significant discounts off their insurance for the first 3 years they are licensed if they have driver training. It's a good thing to consider, since your insurance savings are usually greater than the cost of the course.

As a general rule, if your teen is female the impact on the parent's policy will be less than if your teen is male. This is because, statistically, young female drivers are less of a risk for insurance companies than young male drivers.

The cost of adding a teen to your insurance policy will vary depending primarily on the type of car(s) you own, the age of your teen and their driving history.

Getting the best value for your insurance dollar

Your current insurance company may have given you a great rate when you shopped around last time, but when you add a teen to your auto insurance policy, that company may no longer be the best option for you. It's important that whenever your insurance needs change (marriage, moving, adding a new driver) that you comparison shop to make sure you are still getting the best car insurance rate available.

Here are some samples of what can happen to a GTA family's insurance rates when they add an 18-year-old male onto their policy.

Mom and Dad with one car


(2011 Dodge Grand Caravan)*

Mom, Dad and teenager with 1 car


(2011 Dodge Grand Caravan)*
Top 3 Quotes Price Top 3 Qutoes Price
1 $1270 1 $2823
2 $1453 2 $3421
3 $1510 3 $3676

Your teen is probably excited about the prospect of being in the driver's seat. Don't let their excitement translate into overpriced auto insurance premiums; shop around. Click here to get started: teen auto insurance.

More articles for teen drivers and new drivers

* Quotes were calculated using the Kanetix.ca quote comparison shopping service in November 2011. Details are based on 45-year-old primary drivers residing in the GTA, with no tickets or claims.

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