How much is car insurance in Alberta by age?
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Jessica Ho
If you've been exploring options for car insurance in Alberta, you might be curious about how insurers determine your premium. A major determinant in this is a factor beyond your control: your age.
Key takeaways on the cost of Alberta car insurance by age
- Young drivers are often viewed by insurers as a higher risk, leading to more expensive car insurance rates. As you get older, however, rates tend to decrease – assuming you maintain a clean driving record.
- Class 7 licence holders don't need to be added to car insurance policies yet, eliminating concerns over high premiums at this stage. On the other hand, as a Class 5 driver, you'll require your own insurance if you own a car. If you frequently use a car owned by someone in your household, you'll need to be added to their policy as an occasional driver.
- There isn't one specific age at which Insurance rates start to drop; instead, insurance companies typically reduce rates with each passing year of the driver's age. A significant reduction is often seen after the age of 25, particularly for those who began driving early.
- Other than age, various factors influence your car insurance costs in Ontario, such as gender, location, driving history, driving habits, licence class, vehicle make and model, and vehicle storage.
- To find affordable coverage, it's crucial to actively shop the market. By comparing personalized car insurance quotes with us, you can discover the most cost-effective solution for your needs.
How does age affect Alberta car insurance rates?
Insurance providers consider age to be a significant indicator of risk – younger drivers typically have less experience and a higher likelihood of being involved in accidents that lead to claims (leading to higher car insurance rates). Your insurance costs will likely decrease as you get older, provided you maintain a clean driving record.
Conversely, as you enter your senior years, you may find your car insurance rates increasing once again. This uptick is due to the increased statistical risks associated with driving in your elderly years.
How much is car insurance in Alberta?
Wondering how much car insurance costs in Alberta? According to the 2024 Market Report from the Alberta Auto Insurance Rate Board (AIRB), the average annual premium in 2023 was $1,669, reflecting post Covid approved rate increases. This was an increase (+5.2%) from 2022’s number of $1,587 - showing the impact of inflation on the insurance marketplace.
The average cost of car insurance in Alberta by age
But since rates will vary from person to person, determining whether you're getting a fair deal for your specific situation can be challenging. So let’s examine average rates for a hypothetical driver to gauge how quotes fluctuate in Alberta with each age.
Methodology: Presented above are two tables showing the average cost of car insurance in Calgary for both male and female fully licenced policyholders driving a 2024 Honda Civic EX. Assuming a clean driving record for both, we've calculated average premiums by age using an online auto insurance rate calculator – all ranges and averages provided are reflective of the three lowest quotes available. The insurance policies include $1,000,000 in liability coverage, along with a $1,000 deductible each for collision and comprehensive insurance.
It's important to note that this data represents car insurance rates in Alberta by age for a specific profile. If you have a clean driving record and a clean insurance history, you'll likely pay closer to the lower end of the monthly or annual range by comparing quotes and selecting the company that offers the most affordable rate.
How much is car insurance in Alberta for new drivers?
If you have yet to obtain your full license, car insurance will work differently for you. As a Class 7 driver, you don't need to be listed on a policy as you'll only be able to operate a vehicle when you're alongside a fully licensed driver – therefore, you don't need to worry about high car insurance rates just yet. However, it's a good idea to inform the insurer of the vehicle you're practicing on, just as a precautionary measure. While the policy should remain unchanged, it can differ from provider to provider.
As a Class 5-GDL driver (or probationary driver) with your own vehicle, acquiring auto insurance can be relatively expensive due to your limited experience which indicates a higher risk of claims to insurers.
For example, based on the insurance rate calculator, a 17-year-old female driver with a Class 5-GDL license might expect to pay between $472 and $846 per month to insure a 2024 Honda Civic. And any blemishes on your driving record can further increase these costs.
Conversely, if you're a Class 5-GDL driver without your own car, you won't need your own separate insurance policy. However, if you live with another licensed driver and intend to operate their vehicle, you must be added to their policy as an occasional driver. While this may result in a slight premium increase, it's notably less expensive than securing individual car insurance as a new driver.
At what age does Alberta auto insurance go down?
There isn't a specific age at which car insurance rates invariably begin to decline, as insurance providers tend to offer lower rates with each passing year (until you reach your elderly years). A more noticeable decrease, however, is often seen after you turn 25, particularly if you started driving at a young age.
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Other factors affecting your Alberta auto insurance quote
Apart from age, several other elements play a role in determining your insurance costs. While some factors, like age, are beyond your control, others can be managed to some extent. Let's take a look at some examples.
Gender: Males typically face higher insurance quotes due to statistical trends indicating a higher likelihood of claims.
Driving record: A clean driving history signals to insurers that you're less prone to costly accidents, resulting in lower premiums.
Licence class: Class 5-GDL drivers tend to face higher rates as they have less driving experience compared to fully licensed drivers.
Vehicle type: Generally, more expensive vehicles incur higher insurance costs due to increased repair or replacement expenses. However, certain SUVs and minivans might cost less to insure than sedans due to their association with family use which is often linked to safer driving habits.
Location: Urban areas with heavy traffic or high crime rates usually entail higher insurance expenses compared to rural or suburban areas.
Storage: Keeping your car in a private garage when not in use typically lowers insurance costs compared to street parking.
Driving activity: Increased mileage raises the likelihood of accidents, consequently leading to higher insurance quotes.
Industry factors: External factors like rising vehicle theft, insurance fraud, and escalating claims costs can contribute to higher premiums, despite being out of your control. Insurers adjust rates to balance the risk within the overall market.
Coverage type: One primary determinant of your insurance cost is the coverage you select. Opting for higher coverage limits or adding comprehensive and collision coverage, along with additional endorsements such as accident forgiveness insurance, can significantly impact your premium.
For further insights into your cost of car insurance, visit our page: How car insurance rates are calculated.
How to get the cheapest car insurance in Alberta by comparing quotes
Even with certain factors increasing your premium, it's important to compare car insurance quotes to ensure you're securing the most favourable rate on the market. Each insurer will offer you a different rate even if you give them the same information as shown by the example in the table above – where a 50-year-old male could pay either $144 or $315 for the same auto insurance package. By diligently comparing quotes, you can identify the most affordable option tailored to your needs, even if certain factors such as age contribute to a higher premium
For additional tips on securing affordable coverage, visit our page: How to save on car insurance.
The bottom line
Age is a significant determinant in the cost of your car insurance. Generally speaking, younger drivers encounter higher premiums, but the costs tend to decrease as you get older and build your driving experience. Conversely, senior drivers might see an increase in insurance expenses due to the statistical risks associated with older age. And most importantly, age isn't the sole factor influencing your monthly premiums – there are many methods to reduce your insurance costs, such as comparing quotes across the Alberta market.