How Much Can Good Drivers Save on Car Insurance?

By Liam Lahey
Concept image of a miniature car on top of insurance and bank papers, calculator and few coins nearby

There are many factors that insurers use to determine the car insurance premium you get. Of those factors – gender, age, where you live, the vehicle you drive, how many kilometres you drive annually (there are others) – the one component that’s within your control is your driving record.

A clean driving record gives you more choices for finding a competitive rate for the coverages you need. What constitutes a clean driving record? Simply, a driver who has no minor or major traffic convictions in the past three years, and no at-fault collisions in the past six years or more.

Traffic convictions and at-fault accidents do the opposite: they sully a driver’s record. While many drivers are concerned about insurance rates going up due to a speeding ticket or a fender bender, there are more serious offences that can mar a driving record and raise insurance rates. For instance, being convicted of distracted driving, excessive speeding, or impaired driving. However, multiple minor traffic infractions on a driving record may also trigger a rate increase.

To illustrate the difference in premiums drivers with clean records can get versus drivers who have at-fault accidents on their records, we compared quotes for fictional drivers in both Ontario and Alberta using InsuranceHotline.com’s free-to-use quoting tool:

  • A 40-year-old male driver in Toronto or Calgary who is single with a clean driving record, and who drives a 2018 Honda Civic, compared to a 40-year-old male driver who is single, drives the same vehicle, and has at least one collision in the last three years in either city.
  • A 24-year-old male driver in Toronto or Calgary who is single with a clean driving record, and who drives a 2018 Honda Civic, compared to a 24-year-old male driver who is single, drives the same vehicle, and has at least one collision in the last three years in either city.

What we discovered paints an interesting picture.

Of drivers in Ontario

A driver in Ontario with a spotless driving record has the upper hand on finding cheap insurance than one who has a collision history. However, quotes vary based on location. For a 40-year-old and 24-year-old driver in Toronto, here are the differences one at-fault collision can have on their premiums:

Driver by Age Difference for a Driver with One Collision
40-years-old $531 or 28%
24-years-old $880 or 37%
  • A 40-year-old driver in Toronto with at least one at-fault collision on his record pays, at a minimum, $531 more a year than a driver with a clean record – a 28% difference.
  • A 24-year-old driver in Toronto with at least one at-fault collision on his record pays at least $880 more per year than a young driver without a collision on their record – a 37% increase. It’s worthwhile to note drivers under the age of 25 (especially male drivers) tend to face higher premiums in general because they are considered a bigger risk behind the wheel.

Of drivers in Alberta

Similar to drivers in Toronto, a driver in Calgary with a spotless driving record has a better chance of finding an affordable rate. For a 40-year-old and 24-year-old driver, the difference one at-fault collision can have on their premiums is significant:

Driver by Age Difference for a Driver with One Collision
40-years-old $1,600 or 80%
24-years-0ld $2,184 or 108%
  • For a 40-year-old driver in Calgary with at least one at-fault collision on his record, the premium price jumps by an eye-opening amount of $1,600 more a year compared to a driver with a clean record – an 80% difference.
  • For a driver under the age of 25 living in Calgary with an at-fault collision on his record, it’s another matter – the premium increase he will get at a minimum is remarkably high: $2,184 more per year compared to a young driver with a clean record – that’s a 108% increase.

The bottom line is this: if you want to pay less for insurance, having a clean driving record significantly increases your chances of getting the lowest possible rate. Furthermore, when you consider the price differences between insurers, it pays to shop your rate.

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Beyond the premium: what are the other benefits of a clean driving record?

The No. 1 reason having a clean driving record matters is you will pay less for car insurance than someone with a spotty record. Other benefits include:

  • You have more options finding the coverage you want from a larger number of insurers.
  • You may qualify for additional savings such as a claim-free discount.
  • If your vehicle has never been in a collision, then no claims have been filed, and no money spent on repairing it. In turn, the value of your car is not diminished as a result of an accident.
  • You may have more job opportunities available to you for specific professions that require professional drivers, be it a delivery company, transportation firm, and so on.

What traffic convictions are the most serious?

Racking up traffic convictions of any type can catch up with you in terms of the premium you get. Of course, some are worse than others. Some minor driving convictions may include:

  • Failing to signal when changing lanes or making a turn
  • Not wearing a seatbelt while driving or allowing a passenger in your car who’s under the age of 16 not to wear one
  • Speeding (if less than 49 km/h over the limit)
  • Failing to stop at a stop sign or red traffic light
  • Failing to yield to a pedestrian or other vehicle
  • Making a prohibited turn such as a U-turn at an intersection
  • Driving the wrong way on a one-way street

Major driving convictions are another matter. These types of convictions may result in expensive fines, demerit points on your licence, and possibly serving time in jail. They will inarguably increase your premium. Examples of serious driving convictions include:

  • Impaired driving
  • Dangerous or careless driving
  • Excessive speeding or stunt driving
  • Driving without insurance
  • Failing to report an accident
  • Fleeing the scene of an accident
  • Driving with a suspended licence

How to preserve a clean driving record

We hate to state the obvious, but keeping your driving record clear of any negative marks comes down to the safe driving principles we were taught when learning to drive, such as:

  • Drive defensively. Be courteous to other drivers, cyclists, and pedestrians. Adhere to the rules of the road, maintain a safe distance from other cars, and be extra vigilant when driving in poor weather.
  • Obey the speed limit. Speeding gets you nowhere fast, and it’s a threat to you and everyone around you. Keep in mind posted speed limits apply to ideal driving conditions.
  • Don’t drive distracted. Refrain from fiddling with a mobile device or doing anything that diverts your attention away from safely operating a vehicle.
  • Don’t drive impaired or tired. Never get behind the wheel after consuming alcohol or drugs, and don’t drive if you’re drowsy.
  • Be visible. Use your signal lights whenever you’re changing lanes or making a turn, switch your headlights on when driving at night or in poor weather, and don’t drive in another driver’s blind spot.

Another way to protect your record is to ask your insurer for what’s known as accident forgiveness coverage. If you don’t have any collisions on your record, you are likely eligible for that insurance endorsement. That way, if you have the misfortune of being in an accident for which you are at-fault, your rates will not rise provided you remain with that insurance company.

Why do premiums rise even if I have a clean driving record?

Some things are outside of our control. It’s not uncommon for drivers with clean records to be confused if they see a rate increase despite having no at-fault collisions, traffic violations, or filing any claims. It seems patently unfair. But here’s the rub: it’s your province’s insurance regulator that determines whether or not your car insurance premium increases or decreases.

When an insurance company requests a rate increase from a provincial regulator, that calculation is based on many factors beyond your driving record and experience, including:

  • Premiums are based on what insurers believe they will need to payout in collision claims, and the cost to repair modern vehicles with all the technology they have onboard is rising.
  • Generally, car insurance is a large risk pool all drivers share. There are indications aplenty distracted driving is increasing nationwide, and it is a significant cause of collisions and claims.
  • Insurance fraud accounts for an estimated 15 cents of every dollar paid in auto premiums. Fraud takes on many forms from staged accidents to dishonest tow truck operators, auto body shops, and rehabilitation clinics that overbill for services rendered.
  • Many people who are injured in car accidents hire personal injury lawyers to represent them. A 2017 report published by Ontario’s Ministry of Finance states, “a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons.”
  • Vehicle theft is always an issue, and in some parts of the country, it’s on the increase. Annually, auto theft costs Canadians $1 billion.
  • Severe weather such as floods and major storms are increasing, leading to expensive claims to repair or write-off vehicles.

Maintaining a clean driving record is an asset when it comes to getting an affordable premium. Regardless, your best bet to find the coverage you need at a reasonable cost is to comparison shop for rates whether your policy is up for renewal or not.