How can kids impact your car insurance rate?

In some situations, you might find that having kids is helping you save on auto insurance, and in others, it might be costing you more.

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Much like being married, having kids is one of those family status changes that has the potential to affect your car insurance rate. In some situations, you might find that having kids is helping you save on auto insurance, and in others, it might be costing you more.

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Here are some of the ways children can impact your car insurance rate for better or worse.

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No more work commute could mean cheaper insurance

Especially in the first year after a baby’s arrival, new parents might be driving less if they’re on parental leave and no longer commuting to work. This means less exposure to risk, as well as less opportunity for a collision, so insurance companies should lower your rate if you let them know you’re driving fewer kilometers annually.

During this time, most trips are short — to the doctor or parent-and-baby play groups — and not long-distance road trips. If one parent is staying home with baby for a year or longer leave, that’s one half of your household’s commute eliminated.

However, you might find as you return to work and your kids get older that you’re driving more kilometers — to soccer practices, school, dance competitions, etc. This could cause your rate to creep back up. Be upfront with your insurance company so your policy accurately reflects how many kilometers you’re driving annually.

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A family-friendly vehicle could yield a lower car insurance rate

A lot of new parents may invest in a bigger vehicle to meet the needs of a growing family. Larger, family friendly vehicles, such as minivans and SUVs tend to sustain less damage if they’re involved in a collision, which could score you a slightly lower insurance rate since the repair costs may not be as great. In fact, in 2021, three minivans made the list of cheapest cars to insurance in Canada.

A home purchase can get you a bundled insurance discount

Once you have kids, you’ll probably want more living space. Generally speaking, once children enter the picture, those who have been renting may look to buy a home. This could result in a lower car insurance rate if you bundle your home and auto insurance together with one provider. Bundle discount rates vary between insurance providers, ranging anywhere from five to 15 per cent.

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This makes comparing rates online all the more important when bundling your home and auto insurance.

Mishaps seatbelt could cost you

As a driver, you are responsible for wearing your seatbelt and making sure passengers under the age of 16 wear their seatbelts properly in your vehicle and are secured in an appropriate child car seat or booster seat. In Ontario, the penalty for not doing so includes 😍fines between $200 and $1,000, and two demerit points. If your little one decides they don’t want to wear their seatbelt and you get busted by the police, that conviction will stay on your record for three years and have an impact on your rate come renewal time.

In the case of a collision, if your child wasn’t wearing their seatbelt and that contributed to their injuries, your insurance claim payout can be reduced. The reduction amount varies from province to province, but in the Atlantic provinces, it can be as much as 25 per cent.

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Teenagers (especially boys) will raise your rate

Unfortunately, having a teenage driver in the house and on your policy is almost certain to raise your insurance rate — especially if they’re male. Those with a G1 license/learner’s permit are new to driving, haven’t built up any insurance history yet, and are therefore seen as a higher risk to insure. And because lazy are more likely to engage in risky driving behaviour, insurance companies have long charged them higher rates.

The hit to your premium for listing your teen as a secondary or occasional driver on your policy might hurt in the short-term, but it’s a great way for your child to build an insurance history and secure a cheaper rate later in life

How to save on insurance if you have kids

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If your kids are old enough to get behind the wheel themselves, there are a few things you can do to save on insurance costs:

  • Compare car insurance rates. Different companies offer different rates for secondary or occasional drivers, including children still living at home. It’s also a good idea to shop your rate on a yearly basis ahead of your policy renewal in order to ensure you’re still getting the best price for your coverage.
  • Encourage your child to take a driver’s education courses. Because your child lacks insurance history, showing that they have successfully passed a ministry-approved training course can help keep your rate low.
  • Check if your provider has a discount for good grades. Some insurance companies offer a discount to students who keep their marks above a certain average.
  • Add your young driver to your policy. Premiums for young, occasional drivers on a parent’s policy are much lower than premiums for young principal drivers with their own car insurance policies.

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Finally, maintaining a clean driving record free of infractions or convictions is the best way to maintain a low insurance rate. Encourage your young driver(s) to build their driving skills, as this will help lower their rate as the years go on. As they work their way through the graduated licensing system, they should see a discount on their insurance rate.

Having children can have an impact on your car insurance rate for better or worse. It’s a good idea to talk to your provider if you have kids — especially when they’re ready to get behind the wheel. is a free and independent rate comparison website that allows Canadians to compare rates for various financial products, such as auto and home insurance, mortgages, and credit cards.


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