By Consumer Guide Staff
As students head back to class this fall, auto insurance often becomes one of the biggest expenses on the family budget. From part-time jobs to tuition fees, young drivers already face high costs—and insurance can add another major layer.
According to Daniel Ivans, licensed insurance broker and expert at Rates.ca, the key to keeping premiums affordable is making informed choices and steering clear of common mistakes.
“For young drivers, insurance can be one of the largest expenses they face each year,” says Ivans. “Making informed coverage choices and steering clear of common mistakes can be the difference between keeping premiums affordable and dealing with a financial headache.”
Quick Tips at a Glance
Top 3 Mistakes to Avoid
Listing a parent as the main driver when a student is the primary operator- Switching to an independent policy too soon
- Forgetting to update driving habits or mileage with your insurer
1. Maximize Available Discounts
Good student discounts, driver training credits, and usage-based insurance programs can all lower premiums. Each insurer sets its own criteria, so it pays to shop around and compare options.
Did You Know?
Some insurers offer discounts of up to 25% for students with strong grades or those who complete an accredited driver training program.
2. Think Twice Before Going Independent
It may seem like a milestone to get your own auto policy, but in many cases, it’s more cost-effective for young drivers to remain on a parent’s policy. Independent coverage can be significantly more expensive unless unique discounts or circumstances apply.
Tip: Review policy options each year—what isn’t cost-effective now may change as a driver builds history and experience.
3. Be Honest About Vehicle Usage
If a student takes a family car to another city or uses it for commuting, that must be disclosed to the insurer. Listing a parent as the sole driver when a teen or student is the primary operator could result in denied claims.
Red Flag: Misrepresenting usage is considered insurance fraud—and can result in cancelled coverage.
4. Watch for Coverage Gaps With Borrowed or Rented Cars
Borrowing a friend’s vehicle? Remember—the owner’s policy is usually primary in an accident, but gaps can exist if the borrower isn’t listed. For rental cars, extra coverage is often required through an endorsement or credit card, and each comes with its own limits.
Key Reminder: Always confirm what’s covered before getting behind the wheel of a borrowed or rental car.
5. Update Driving Habits and Mileage
If driving habits change during the school year—say, commuting less or only driving on weekends—informing the insurer could reduce premiums. Mileage updates often lead to savings.
Money-Saver: A simple mileage update could save families hundreds of dollars annually.
The Bottom Line
Heading back to school is stressful enough without worrying about unexpected insurance bills or denied claims. A quick call to your provider before the semester starts can help ensure proper coverage—and possibly lower costs.
