Car Insurance for New Drivers in Ontario: Costs, Coverage, and What to Expect

Reviewed by Michelle Bragg, VP Personal Lines, RIBO Licensed | Last Reviewed: June 2026

Getting a driver's licence is a major milestone, but many Ontario families quickly discover that insurance is often one of the largest costs associated with driving. For most new drivers in Ontario, auto insurance premiums are typically higher than those paid by experienced drivers because insurers have less driving history available to assess risk.

The cost of car insurance for new drivers in Ontario depends on factors such as age, driving experience, licence class, location, vehicle type, annual mileage, and selected coverage. While rates vary significantly between drivers and insurers, there are several ways Ontario families can better understand and manage insurance costs.

This article is provided for general educational purposes only and should not be considered insurance, legal, or financial advice. Auto insurance coverage, eligibility, and premiums vary based on individual circumstances and insurer underwriting guidelines.

WHAT IS CAR INSURANCE FOR NEW DRIVERS IN ONTARIO?

Car insurance for new drivers in Ontario refers to an auto insurance policy purchased by someone with limited driving experience, including newly licensed G1, G2, or G drivers. Insurers assess new drivers differently because they have a shorter driving history, making factors such as driver training, vehicle choice, and household insurance arrangements especially important when determining premiums.

WHY IS NEW DRIVER INSURANCE OFTEN MORE EXPENSIVE?

Insurance for new drivers in Ontario is generally more expensive because insurers have less historical driving data available to evaluate risk. Insurers also consider data trends. For example, according to the Ministry of Transportation of Ontario's (MTO) Ontario Road Safety Annual Report, drivers aged 16 to 24 accounted for over 55 thousand collisions in 2022, over 15% of the national total for that year. This is one reason insurers place significant emphasis on driving experience when evaluating risk.

As a driver gains experience, maintains a clean driving record, and avoids claims or convictions, premiums may become more favourable over time.

WHAT AUTO INSURANCE COVERAGE IS REQUIRED IN ONTARIO?

Ontario drivers must carry certain mandatory coverages before operating a vehicle on public roads.

According to the Financial Services Regulatory Authority of Ontario’s (FSRA) What is in a standard auto insurance policy documentation, Ontario auto insurance policies include mandatory accident benefits, third-party liability coverage, direct compensation-property damage where applicable, and uninsured automobile coverage.

Third-Party Liability Coverage

Third-party liability coverage helps protect drivers financially if they are responsible for injuries or property damage suffered by another person.

Ontario requires a minimum liability limit of $200,000, although many drivers choose higher limits.

Accident Benefits Coverage

Accident benefits provide support following an automobile accident regardless of fault.

Coverage may include:

• Medical expenses
• Rehabilitation costs
• Income replacement benefits
• Caregiver benefits where applicable
• Attendant care benefits

Uninsured Automobile Coverage

This coverage helps protect insured drivers if they are involved in a collision with an uninsured motorist or are injured in a hit-and-run incident.

Direct Compensation-Property Damage (DCPD)

Where applicable under Ontario regulations, DCPD may provide compensation for vehicle damage when another insured driver is responsible for an accident.

WHAT OPTIONAL COVERAGES DO NEW DRIVERS OFTEN CONSIDER?

Beyond mandatory insurance, many Ontario drivers choose additional protection.

Collision Coverage

Collision coverage helps pay for repairs or replacement of the insured vehicle following a collision with another vehicle or object, regardless of fault.

Comprehensive Coverage

Comprehensive coverage protects against losses caused by events other than collisions.

Examples may include:

• Theft
• Vandalism
• Fire
• Falling objects
• Windstorms
• Animal impacts

Specified Perils Coverage

Specified perils coverage protects against only the risks specifically listed in the policy wording.

All Perils Coverage

All perils coverage combines elements of collision and comprehensive coverage and may provide broader protection in certain situations.

Understanding your insurance needs and coverage options is an important part of owning a vehicle. To learn more about what car insurance covers in Canada, consider reading our blog on the topic.

WHAT FACTORS AFFECT NEW DRIVER INSURANCE COST IN ONTARIO?

Several rating factors influence new driver insurance costs.

Age of the Driver

Younger drivers frequently pay higher premiums because they are statistically more likely to be involved in collisions, supported by statistics from Transport Canada's National Online Collision Database.

Licence Class

G1, G2, and fully licensed G drivers may be rated differently by insurers.

Many insurers view progression through Ontario's graduated licensing system favourably when accompanied by safe driving habits.

Driving Experience

The length of time a driver has been licensed can significantly affect premiums.

Vehicle Type

Vehicles with strong safety ratings, lower repair costs, and lower theft rates may be less expensive to insure than luxury or high-performance models.

Where You Live

Postal code remains an important rating factor.

Traffic density, claims frequency, theft rates, and repair costs may differ across Ontario communities.

Annual Mileage

Drivers who spend more time on the road may present a different level of risk than drivers who use their vehicles less frequently. Read our blog on how annual mileage affects car insurance for a full explaination.

Coverage Selections

Adding optional coverages can increase premiums while also expanding protection.

Deductible Amount

Higher deductibles may reduce premiums, while lower deductibles may increase them.

HOW DOES ONTARIO'S GRADUATED LICENSING SYSTEM AFFECT INSURANCE?

New drivers are required to move through a 3-tiered system to become fully licensed drivers. The 3 stages of this system, in order, are G1, G2 and a full G licence. 

According to the Ministry of Transportation of Ontario’s (MTO) documentation on getting a G licence, Ontario's graduated licensing system helps new drivers gain experience on public roads with the supervision of a driving instructor, ultimately developing real world driving experience over time.

Insurers often consider a driver’s licence stage (G1, G2 or G) when evaluating risk and determining premiums, as well as a drivers’ habits. 

Does Driving School Affect Insurance Premiums?

Participating in government-approved driver’s education allows new drivers to learn safe and appropriate driving habits that can positively impact their insurance premiums in the future. Completing an approved driver education course can also accelerate a new driver’s education by allowing them to take their G2 road test 4 months earlier according to the MTO’s guide on getting a G driver's licence.

According to the MTO’s Ontario Road Safety Annual Report, over 11 million licensed drivers travel Ontario roads annually, creating diverse driving environments that vary by region, traffic density, weather conditions, and road type. These variables contribute to differences in insurance pricing across the province and amplify the importance of proper driver safety and training.

While savings vary by insurer, completing recognized driver training may contribute to more favourable premiums.

What Are Typical G2 Car Insurance Rates Influenced By?

G2 car insurance rates are determined by many of the same factors used for other drivers.

Common considerations include:

• Driver age
• Years licensed
• Location
• Vehicle type
• Coverage selected
• Claims history
• Convictions
• Annual kilometres driven

Because every insurer uses its own underwriting model, premiums can differ significantly for similar drivers.

SHOULD A NEW DRIVER BE ADDED TO A PARENT'S POLICY?

In many households, a newly licensed driver is added as an occasional or secondary driver on an existing family policy.

This arrangement may be appropriate when the vehicle is primarily driven by an experienced household member.

However, insurers require accurate disclosure of vehicle ownership, primary use, and driver information. Families should discuss their situation with a licensed insurance professional to ensure the policy is structured correctly.

To learn more about adding new drivers to existing policies, consider exploring our blog on the topic.

HOW CAN ONTARIO FAMILIES REDUCE FIRST-TIME DRIVER INSURANCE COSTS?

Compare Multiple Quotes

Comparing options from several insurers can help families understand available coverage choices and pricing differences.

Choose a Vehicle With Lower Insurance Risk

Vehicles with lower theft rates, strong safety performance, and reasonable repair costs may qualify for more favourable premiums.

Complete Driver Training

Recognized beginner driver education programs may help demonstrate commitment to safe driving.

Maintain a Clean Driving Record

Avoiding collisions, convictions, and insurance claims may support lower premiums over time.

Consider Appropriate Coverage Levels

Drivers should review deductibles, optional coverages, and liability limits to ensure coverage aligns with their needs.

Explore Available Discounts

Some insurers offer discounts for:

• Driver education completion
• Winter tires
• Multi-vehicle households
• Bundled insurance policies
• Telematics or usage-based insurance programs

Families can learn more and begin their investigation into what they need from an auto insurance policy by reviewing our online resources to get a better understanding of what best matches your personal needs.

WHERE CAN NEW DRIVERS COMPARE INSURANCE OPTIONS?

Comparing multiple insurers is often one of the most effective ways to understand available coverage options.

Families seeking personalized guidance can request a quote to review available coverage options and discuss their insurance needs.

For additional consumer information, Ontario drivers can also review our online resources or explore others from the Financial Services Regulatory Authority of Ontario (FSRA) and the Ministry of Transportation of Ontario (MTO).

FREQUENTLY ASKED QUESTIONS

How much is car insurance for new drivers in Ontario?

Car insurance for new drivers in Ontario varies based on age, location, vehicle type, driving experience, coverage selections, and insurer underwriting criteria.

Are G2 drivers considered new drivers for insurance?

Yes. Many insurers consider G2 drivers to have limited driving experience and assess risk differently than fully licensed drivers with established driving histories.

Does driver training help lower insurance premiums?

Many insurers recognize approved driver education programs and may offer more favourable rates to eligible drivers who complete them.

Can a new driver be added to a parent's insurance policy?

Yes. New drivers are often added as occasional drivers on a household policy when the vehicle is primarily driven by another insured family member.

What vehicle is best for a first-time driver to insure?

Vehicles with strong safety ratings, lower repair costs, and lower theft rates are often viewed more favourably by insurers.

Will insurance costs decrease over time?

Insurance premiums may become more favourable as drivers gain experience, maintain a clean driving record, and establish an insurance history.

Blog Updated: August 2026