When determining your auto insurance rate, an insurance company will take a lot of information into consideration, including your driver’s licence history.
While the information in a driver’s licence history may vary from province to province, it will generally include identifying details (sex, height, date of birth), licence number, licence suspensions, replacements, renewals, class changes, any driving education courses you’ve taken, where you’ve lived, and any convictions that fall under the Criminal Code of Canada as well as the Highway Traffic Act.
Let’s take a look at why this information matters to insurance companies and how it can affect your rate.
Sex and date of birth
While many provinces find the practice discriminatory, age and sex are considered identifying risk factors that affect car insurance. Regardless of your sex, you can expect to pay more for car insurance if you’re under 25, since you haven’t accumulated much driving experience yet.
Your rates will drop as you get older, assuming you maintain a spotless driving record. And men can generally expect to pay more on average for car insurance than women, since statistics show they’re riskier behind the wheel. Some insurance companies offer a mature driver discount for those with good driving records over the age of 50. However, it’s common for premiums to rise for the elderly — around age 80.
Licence class
Different vehicles require different licences. In Ontario, for instance, there are 12 different licence classes. A class G licence is required to drive a car, van, or small truck, while a motorcycle requires an M licence.
Different vehicles have different risk factors associated with them, so your insurance company will consider those factors as well your years handling a specific type of licence and its associated driving courses.
Ultimately, the best way to keep your car insurance premium low is to maintain a clean driving record as much as possible, regardless of the vehicle you drive.
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Licence suspensions
A licence suspension doesn’t automatically drive up your insurance rate. Having your licence suspended for medical reasons, for instance, won’t increase your premium; it’s an administrative suspension. Having your licence immediately suspended because you failed a roadside breathalyzer test is also an administrative suspension and won’t affect your insurance premium, either.
What will drive up your rate, however, is an impaired driving conviction, which will cost you more money for auto insurance for up to six years. Any driving infraction, ticket, or collision can have an impact on your insurance premium, depending on the severity and who’s at fault.
What caused the suspension plays a role in how your insurance provider assesses future risk, so how long it affects your insurance rate will depend on the nature of the infraction and how long the suspension is in place.
Driver education course
If you’ve taken a government-certified driver training course, your insurance company may reward you with a discount on your auto insurance.
For new drivers, training recognized by your insurance company tells them you have a solid foundation of driving skills, while driver improvement courses allow older drivers to brush up on their skills. An insurance company will factor training from certified schools into their premium calculations.
If your licence has been suspended, taking a course again or for the first time may help to rehabilitate your driving record by demonstrating you’re serious about road safety and improving your driving habits.
Address changes
One of the items your driver’s licence history includes is your current and past residential addresses. This is useful information to insurance companies because where you drive and park your car matters. If you stay in the same city, you may be closer to your place of work, which means reduced mileage. If you move to a rural area and commute into a major centre every day, you’re going to be spending more time on the road and your insurance provider will want to know this.
Similarly, living in a rural area will likely reduce your insurance premium, but even if you have a spotless driving record, the number of claims made in your neighbourhood will impact your rate. That’s because your premium is based on what insurance companies expect they will need to spend to settle claims in a given area based on historical data. That means, depending on the insurance company, you might pay more or less for car insurance even though you’re in the same neighbourhood.
Because insurance companies employ a star rating system for drivers, maintaining a spotless driving record in a high claims area will benefit you if you move to a lower risk area because you’ll bring a strong star rating with you.
How to obtain a copy of your driver’s licence history and keep your insurance rate low
Just as an insurance company can look up your driver’s licence history, you can order yours from your provincial government, usually for a small fee. It can be helpful to know your exact driving history so you’re on the same page as your insurance company.
While all insurance providers tend to apply the same criteria when reviewing your driving history, they don’t all have the same discounts or products. If you know you have a clean driving record, it’s worth shopping around and finding out how different insurance providers reward safe drivers like you.
