My 18-year-old son lives with us. He has a G2 license and uses our car a couple of times a week. Do we need to notify our insurance company? Also, what would be the cost? If he gets his own car at 18 and we don’t put him on our insurance, what would you predict his monthly premium would be? – Kat, Ontario
Insurance companies have a house rule: they want to know about every licensed driver who lives with you, period.
“They want to assess the risk in case that driver ever takes out your car,” said Adam Mitchell, chief executive officer of Whitby, Ont.-based Mitchell & Whale Insurance Brokers Ltd., which operates as Mitch Insurance. “Dad could be sleeping and the keys are on the counter.”
In Ontario, the application for auto insurance asks you to list all drivers of the car you’re insuring in your household or business.
That means any licensed driver, including family members and roommates, under the same roof who could drive your car – even if they don’t regularly use it, Mitchell said.
By adding them to the application, you’re adding them to the policy as an occasional driver – and that usually costs more.
But if those drivers only have a learner’s permit – that’s a G1 licence in Ontario – you don’t need to add them, said Anne Marie Thomas, director of consumer and industry relations for the Insurance Bureau of Canada (IBC).
“If they live with you, once they graduate to a G2, they must be added to your policy,” Thomas said.
If you don’t add a driver and your insurance company finds out – say, if that driver crashes your car – you could be denied coverage and your policy could be cancelled for lying on your application, Thomas said.
But if you don’t want to add a licensed driver who lives with you as an occasional driver, you can exclude them from your policy if both of you sign a form promising that they will never drive your car.
“You are contractually banning that driver from driving the car,” Mitchell said. “If they take the car out and they crash it, there’s no coverage.”
Although insurance rules vary by province, they’re similar everywhere – you need to let your insurance company know about drivers who live with you, Thomas said.
Rise to the occasion?
How much more you could pay for adding a child to your policy depends on the car and driver. For instance, adding an 18-year-old male with no traffic tickets as an occasional driver on a policy for a 2024 Honda Civic in Oshawa, Ont. would cost an extra $1,700 to $2,500 a year, depending on the insurance company, Mitchell said. Adding an 18-year-old female driver would likely cost about half that.
Several provinces, including Alberta, Ontario and Quebec, allow insurance companies to look at your age and gender when setting insurance rates.
While insurance generally gets cheaper for everyone as they get older, men typically pay more than women the same age.
That’s because, on average, young drivers get in more crashes than older drivers and male drivers get in more crashes than female drivers, Thomas said.
In Ontario in 2021, the most recent year with a detailed report, 2.9 per cent of male drivers – 164,319 out of more than 5.6 million – got into crashes. For female drivers, that accident rate was 1.6 per cent – 85,565 out of nearly 5.3 million.
While $1,700 or more to add your 18-year-old son as an additional driver might seem steep, he could be paying much more if he got his own car and insured it, Mitchell said.
For instance, to insure that 2024 Civic on his own, he could pay $10,000 or more a year.
If he completed a driver training program, that could drop to around $8,000, depending on the insurance company.
Many companies now also offer telematics – smartphone apps that track your driving – that could, depending on the company, bring discounts of up to 25 per cent for safe drivers but an added surcharge (typically, up to 5 per cent) for bad drivers, Mitchell said.
Added benefits?
High insurance costs might make it tempting for young drivers to take the bus until they’re 25 – the age that rates typically start to go down for drivers who haven’t received tickets or been in an at-fault collision.
“You are now a lower risk profile because you’re 25 – [there’s] full frontal lobe development and less bad decision making,” Mitchell said.
But if you’ve never been insured – either on a parent’s policy or your own – your rates will stay higher for longer, he said.
Insurance companies give drivers a star rating – typically, it’s zero to six stars. The higher your rating, the less you pay for insurance.
“One star is one year of insured, accident-free driving,” Mitchell said. “So, if [you’ve never been insured], you don’t accumulate stars.”
In other words, adding your kids as occasional drivers now will help them pay less for insurance later, he said.
Also, if they’re away for school but back in the summer, you could pay a lot less to keep them on your policy – especially if they’re too far away for frequent weekend visits, Mitchell said.
“If he’s [hundreds of kilometres away] at McGill, they will drop that surcharge by [up to] 70 per cent for a distance like that,” Mitchell said.
Also, you can lend your car to someone who doesn’t live with you, including your kids, without telling your insurance company – as long as it only happens occasionally, IBC’s Thomas said. But if someone drives your car regularly, your insurance company wants to know – and may ask you to add them to your policy.
“Somebody who drives your car a couple of times a week isn’t somebody you just lend your car to,” Thomas said. “That’s a regular operator of your vehicle.”
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