It seems like a “right of passage” from childhood into becoming an adult. Your little boy or girl turns 16 and MUST have a car because everyone in school has one. Teens crave the freedom away from Mom and Dad, acceptance by their peers and the ability to show off (with the right vehicle of course!).
Teen Driving Statistics
Motor vehicle crashes are a leading cause of teen death in the Canada. Teens crash for many reasons, but the most common are overconfidence, speeding, impaired driving, distraction and inexperience. In addition, seat belt use among teens is the lowest of any age group on the road.
Driver Education
In fact, because of the high death toll involved with teen driving, Ontario enacted Graduated Driver Licensing (GDL) laws.
Graduated Driver Licensing introduces teenage drivers to the road in stages, over an extended period of time and in an environment that minimizes risk. First is the Permit Phase where the teen practices with supervision. Next is the Provisional or Probationary Phase where the teen is allowed independent driving with restrictions. Only after successfully completing both phases will the teen be granted full driving privileges. As your teen learns this new and important skill, practice is very important. As a parent or guardian of a new driver, spend as much time as possible helping and teaching your teen good driving habits.
Ontario adds restrictive laws that go along with having a GDL license, such as:
- May not drive between midnight and 5:00am
- May not have more than one passenger in the car who is under 21 and not an immediate family member
- May not use a cell phone (including hands free), or any other hand held electronic device
- Driver and ALL passengers must wear seat belts
In Ontario your child must complete at least 12 months of driving, and be at least 16 years of age, before they can apply for a standard driver’s license with no restrictions.
Ontario Fraud Laws and Auto Insurance
Insurance statistics show that since the youthful driver is significantly more likely to have an accident than a typical adult driver, so there will be a higher premium charged when the youthful driver is added to the parents policy.
There is a temptation then to “forget” to add the new driver to the auto policy or not list the new driver on your renewal questionnaire in order to save money even though the child is driving Mom or Dad’s car. We caution you against this practice. The Province of Ontario has certain fraud laws in this area that will allow an insurance company to deny a claim in the event the driver is an undisclosed household operator.
Insurance-Friendly Cars For Teens
The decision is made. You want to buy your son or daughter their first car. It will be in your name and properly added to your policy. But what to buy? You know it’s not only the car model you have to consider. You also have to think about the impact the car will have on your auto insurance.
Insurance companies surcharge youthful operators in three areas:
- Liability
- Comprehensive (theft)
- Collision (damage caused to the vehicle in an accident
If you choose a vehicle that may be older, and does not require comprehensive or collision (a lower value vehicle) the premium will be considerably less than a newer one which will require full coverage.
Let us assist you in making a good choice for your teen. Contact Lackner McLennan & Erb and Erb and one of our brokers can help you make the right decision when buying that first car for your teenager.
Disclaimer
Lackner McLennan and Erb and Erb provide these informational articles to educate the public about insurance and investment related matters. This article does not substitute for broker advice regarding your specific insurance or investment needs. For a comprehensive strategy to tackle what you, your family, or your business, may need we invite you to speak directly to a broker who can guide you through all the options available to you.
