If you’ve ever added a young driver to your insurance policy, you probably felt the sting of sticker shock. Parents often wonder: “Why does it cost so much when the car is old and only has liability coverage?”
It can feel unfair, but there are solid reasons behind those numbers. Let’s break it down.
1. Young Drivers Are Riskier Drivers
Insurance is all about risk. The more likely you are to get into an accident, the higher your premium. And unfortunately, the stats don’t lie: drivers under 25, especially those just starting out, are far more likely to be involved in collisions.
Even if your son or daughter is a careful driver, the insurance company has to look at the bigger picture. On average, young and inexperienced drivers have more claims, and more serious ones.
2. The Age of the Car Doesn’t Matter Much
A common misconception is that an older car should mean lower insurance. That’s true if you’re paying for coverage that repairs or replaces your own vehicle. But when you only carry liability coverage, the car’s value isn’t the issue.
What matters is the damage that vehicle can cause to someone else. A 2010 sedan can still run a red light and cause a multi-car accident with injuries worth millions of dollars. That’s why the liability premium is high, no matter how old the car is.
3. Why the Premium Can Be $600 a Month
When a young driver is listed as the principal driver on a car, the assumption is that they’re driving it most of the time. More time on the road means more exposure to risk. Combine that with:
• Age (under 25)
• A G2 license (still a learning stage)
• Ontario’s high accident and injury claim costs
…and the price climbs fast. As painful as it feels, $600 per month is pretty standard for new young drivers in Ontario.
4. Are Insurance Companies Just Ripping People Off?
It can seem that way, but here’s the reality: premiums are based on the cost of claims. And claims are expensive. Just one serious injury accident can cost millions of dollars in medical care, rehabilitation, and lost income.
Insurance companies don’t set rates to be unfair, they set them to cover those real-world costs. Without enough money in the system, no one’s claims would get paid.
5. How to Keep Costs Down
While you can’t erase the young driver “penalty,” there are a few things that may help lower the bill:
• Driver training courses – Many insurers give discounts for approved courses.
• Occasional driver status – If the young driver isn’t the main user, this could help.
• Clean record – Tickets and accidents will make rates skyrocket.
• Shop around – Different insurers weigh risk differently.
• Telematics (usage-based insurance) – Some programs reward safe driving habits with lower rates.
The Bottom Line
Insurance costs for young drivers aren’t about the car being new or old, they’re about the risk of what can happen on the road. Even a modest vehicle can cause major damage in an accident, and insurers have to price that risk accordingly.
It may not make the monthly bill easier to swallow, but understanding the “why” helps take away the mystery. And the good news is, as young drivers gain more experience and build a clean record, the cost does go down over time.
✅ Need help navigating young driver insurance?At L.D. Dermody Insurance Brokers, we understand how overwhelming these costs can feel. Our team can walk you through your options, shop around on your behalf, and find ways to keep your premiums as manageable as possible.
📞 Give us a call or send us a message today , we’re here to help you protect your family while keeping your budget in mind.
