Here's how your insurance is affected by license upgrades

Have you upgraded your license? Moving from a Class 5 learner's permit to a full Class 5 license is a huge step and, rightfully so, considered a rite of passage for young people across the province. A full license shows you have the skills to drive safely on the road and know exactly what to do to get from point A to point B within the law. Furthermore, you'll need to have held your learner's permit for at least two years before you can get your full Class 5 license, which will help ensure you have at least the right driving record and time behind the wheel.

But what about your insurance? How does your insurance reflect a change in your license? After all, if a license indicates improved driving skills, shouldn't that show your insurer that you're trustworthy enough to qualify for a discount?

Simply put, does getting a full Class 5 license lower your insurance rates? Read on for the answer (and more!) below.

Insurance rates for inexperienced drivers can be expensive

As you may already know, being an inexperienced driver—both in terms of how long you've held your license and your age—can lead to higher insurance rates. Why is this? Well, insurance companies assess your rates based on a number of factors (which vary by provider) that essentially calculate your risk. The higher your risk, according to the statistics each insurer has in its databases, the higher your premiums will be.

Almost all insurance companies consider being inexperienced and young to be a higher risk. Unfortunately, statistics simply work against these types of drivers. It is proven that the risk of a road accident is almost three times higher among adolescents aged 16 to 19.

You may be a great driver, and having a clean driving record is a big help, but unfortunately, there's not much you can do about your age and inexperience except wait and slowly build up the time and expertise behind the wheel. High premiums will decrease as you demonstrate that you're a law-abiding and safe driver – you just need to be patient.

Does having a full driver's license reduce my car insurance rates?

Short answer: yes! Most drivers, which vary depending on their insurance provider, will see an insurance discount of approximately 10% on their insurance premium when they upgrade from a learner's permit to a full license.

It's not a huge discount, but it's something, and for young drivers, it can represent relatively significant savings. Furthermore, the more years of clean driving you accumulate, the lower your insurance rates will be. Four to five years of clean driving can reward you with a discount of up to 25% on your insurance rates for having a claims-free record. This also assumes you haven't received any tickets or been involved in any at-fault incidents during that period, as these factors will also be considered in your clean driving record.

How can I reduce my car insurance premiums if my rates are still high with a full license?

Being young also affects your rates, even if you obtained a full license before the age of 25. The time spent getting a full license won't be wasted, but it may take some time to pay off. Until then, there are several ways to lower your rates even further—without reducing your coverage! Here are some tips to lower your rates:

• Take a defensive driving course. There are many options in Quebec. You could ask your broker or insurer for advice on which defensive driving courses are approved for insurance discounts.
• Drive less. The more kilometers you accumulate, the more you'll pay. Statistically, those who spend more time and distance on the road are more likely to have an accident. You can opt for public transportation if possible.
• Increase your deductible. This means you will pay more in the event of a claim, but your overall insurance premiums will be reduced.
• Drive carefully. Free claims are a long road. You won't see immediate results, but being free for 3-5 years can yield significant benefits.
• If you drive an older car, consider dropping collision/comprehensive coverage. Some cars cost more to repair than they're worth, so at this point, it's wiser to simply forgo those extra protections and reduce your overall costs.
• Work with a broker – like those at Panda7 – to review your personal situation, help you find the best car insurance deals in Quebec, and get expert advice!

It's frustrating, and we understand. Being a young, inexperienced driver is a lot of fun once you're finally behind the wheel, alone, with nothing but the open road ahead… but you also have to worry about those high insurance premiums. Don't worry! Your insurance rates will decrease when you get your full license and will continue to decrease as you slowly gain experience over time.