Why Is Insurance So Expensive for Young Drivers?

You are young only once in your life. You have got great friends and you naturally want to have an interesting life. You are constantly experiencing new things, new cultures, and most importantly, you have got your whole life ahead of you. 

Of all the great joys of youth, getting a new car is a particularly big milestone. However, there’s a downside to it as well—those big chunks of insurance premiums.

If you have any firsthand experience with insurance, you already know that they are pretty hefty for young drivers, particularly in Edmonton. 

With lots of bridges, highways, and a very punishing winter, the cost of car insurance in Edmonton is always on the higher side. Add to that a vast number of academic institutions full of young students and you will understand in a bit why the premiums are so high. Read here about car insurance in Edmonton.

Factors That Affect Your Car Insurance Premium

  • Age 

Young people are considered high risk because they have little to no experience behind the wheel. They have no past driving track record, let alone a good one, to vouch for them. Consequently, they have more chances of meeting with an accident. 

  • Location

People residing in areas with a historically higher number of car accidents are charged a higher premium for their car insurance. Edmonton, Alberta is full of bridges, leading to frequent diversions, lane closures, and narrow roads. Moreover, they have a lot of high-speed highways and a very rough winter. So, the cost of car insurance is justifiably high.

  • Driving Pattern / Telematics/ Past driving and Vehicular History

Car insurance companies try to find out what kind of driver you are. If you have opted for telematics, they can track your driving pattern. And even if you have not, they can track your accidents and claim history to find out your past driving and vehicular history. While good history gets awarded with a renewal discount, a bad history means that you have to pay the full amount. 

  • Coverage type

Your car insurance premium will change depending on the coverage type of your insurance plan—liability, third-party coverage, collision coverage, or comprehensive coverage.

Why Is Age Such A Big Factor

  • Brand loyalty

Young people aren’t particularly loyal to a brand in the case of car insurance. They tend to shop around more before opting for one. Hence, the car insurers incur costs for attracting and onboarding new customers, of whom they are not even sure of recurring renewals.

  • Driving behaviour 

Even if you have a particularly sober driving habit, other young drivers might not share this quality. Drunk driving, ignoring traffic signals, speeding, using mobile phones while driving, and other driving offences are common among young drivers. 

They also tend to go for more long drives, leading to more car usage. These all significantly increase the cost of car insurance for all young drivers.

  • Experience

The young drivers don’t have a track record to show for. That is because they might not have experience driving. 

Getting familiar with the whole area and driving responsibly in different geographic, traffic, and weather conditions adds to the driving experience. However, these take the time that young drivers haven’t put in at the time of choosing insurance.

  • Credit Score

Credit score also affects the premium paid by the car owners. Young people usually have debts such as study loans, which they haven’t repaid yet. 

Also, young people don’t usually have a lot of money, so they tend to falter more on credit card payments, other bill payments and even resort to fraudulent activities. More often than not, they have a lower credit rating, leading to higher car insurance premiums.

How To Find Cheap Car Insurance For Young Drivers

There are certain ways you can try to reduce your car insurance cost in Edmonton as a youth.

  • Shop around and get quotes from different car insurers—ask for discounts.
  • Agreeing to set up a tracking device/ telematics can instill confidence among car insurers leading to discounts.
  • You can opt for the SmartRide program offered by Nationwide Insurance to get an idea about and thereby better your driving pattern. This may help you in reducing the premium.
  • Find policies that include ‘Accident Forgiveness. This can stop your insurance cost from rising after your first accident on the road. 
  • Certain cars have fewer safety features and/or more repair costs. They usually have higher insurance costs. Make sure you are investing in the right car, to begin with.

Things To Keep In Mind To Reduce Future Insurance Premiums For Young Drivers

While you may have to pay a slightly higher premium, for now, it can plunge in the near future under certain circumstances. Most, if not all of these, are in your hands!

  • There are a lot of schools, universities, and other academic institutions in Edmonton. Drive responsibly and watch out for students and other young drivers on the road. While the SmartRide program can help in maintaining a responsible driving habit, enrolling yourself in a good driving school may be a wise step if you need to enhance your driving skills significantly.
  • Most car insurers consider drivers below the age of 25 as young and hence, high risk. So, as soon as you turn 25, there is a high chance that your insurance premium will drop. This, however, might not be the case if you’ve submitted a lot of claims by the time you turn 25.
  • With experience, the insurance premium will decrease.
  • Investing in a more reliable car will result in lesser claims submitted by you.


To conclude, car insurance for young people in Edmonton as well as in Canada as a whole can be expensive. But if you look properly for all the available discounts, you may be able to save some money on your car insurance premium.