How driving history impacts car insurance rates in Canada

Insurance companies view a person’s driving record as a strong predictor of the types of claims they may end up making in the future. Because of this, insurers also rely heavily on the information this document provides when setting premium prices.

What is a driving record?

Also called a driver’s abstract or motor vehicle report (MVR), a driving record provides a detailed snapshot of a person’s driving history in the past five years. The document includes details about a motorist’s:

• Total demerit points
• Suspensions and reinstatements
• Driving convictions as per the Highway Traffic Act and Criminal Code of Canada
• Driver education courses completed

According to Ontario-based brokerage firm aha insurance, contrary to popular belief, a driving record does not indicate accidents that motorists were involved in.

Read more: Where can you find the cheapest car insurance rates in Canada?

In terms of personal details, a driver’s abstract typically includes a motorist’s:

• Full name
• Driver’s license number
• Date of birth
• Sex
• Height
• Class
• Conditions and endorsements
• License status
• Earliest license date available
• License expiry date

For privacy reasons, the report does not disclose a driver’s residential address. It also excludes tickets for non-moving violations – such as parking tickets and not having proof of insurance – or any criminal convictions beyond driving, which do not have an impact on car premiums.

Read more: Revealed – the 10 least expensive vehicles to insure in Canada

Why does a person’s driving history matter to car insurance companies?

Because a driving record can be an accurate determinant of the types of claims a person is going to make, auto insurance providers use the information detailed in the report as among the biggest parameters when calculating premiums.

Elements in the driver’s abstract such as traffic violations – speeding tickets, tailgating, and DUI convictions – and insurance-related infractions – late payments, overdue bills, and too many past claims – can impact insurance costs some more than others.

“Insurance companies determine your risk before they take you on as a customer,” financial comparison website Finder wrote in a guide on its website. “One way to do this is to look at your driving record. Insurers use this data to predict how likely they’ll end up paying out a claim.”

Read more: Why motorists shouldn’t let their car insurance policies auto-renew

The firm added that motorists with a clean record and who have never been involved in an accident are considered safe drivers and may qualify for discounts and lower monthly premiums. Drivers with multiple traffic violations and those who have been in collisions, on the other hand, are seen as high risk, which means higher insurance costs.

How does a person’s driving record impact car insurance rates?

Violations, depending on the severity, stay on the driver’s abstract at different lengths of time, which have a corresponding impact on auto insurance premiums.

Speeding tickets, distracted driving, and other moving violations, for example, remain on the record for three years, potentially raising premium prices during the period. At-fault collisions are reflected on the report for only three years but can affect insurance costs for up to five years.

DUI convictions, meanwhile, stay on a person’s driving history for between six and 10 years, but some insurance companies can provide motorists who are able to maintain a clean record for six to eight years standard rates.

Read more: High-risk auto insurance - what Canadian drivers need to know

Additionally, motorists with accident forgiveness plans can have their first driving infractions excluded from their records, thereby having no effect on their car premiums. Repeat offences, however, could push up quotes.

The price comparison website Lowestrates.ca provided an estimated cost of increases, depending on the severity of the traffic conviction. The table below shows the details.

Can Canadian motorists check their driving record?

Canadian drivers can request a copy of their abstracts through the Ministry of Transportation’s website for a fee, ranging from $10 to $20. They will also need to provide their personal details, including date of birth, residential address, driver’s license number, and social insurance number (SIN).

Motorists can choose to have their records sent online or delivered by mail. The latter can take a few weeks.

Accessing their motor vehicle report allows drivers to get a clear estimate of their annual insurance cost and help them determine what discounts they are eligible for. 

Read more: What auto insurance discounts are you eligible for?

How can motorists improve their driving record?

Even if a motorist has a blemished record, there are still steps they can take to improve their driving history and eventually lower their premiums. These include:

• Taking a driver safety course: Some insurance companies offer discounts to policyholders who have completed driver education courses.
• Paying out of pocket: If they can afford to, drivers can opt to pay for damages out of pocket to avoid filing claims, which can push up premiums.
• Using public transit: This will mean lower mileage, reducing the likelihood of accidents.
• Removing high-risk drivers from their policies: High-risk drivers are an added liability to their auto insurance policies. Motorists can slash premiums by excluding them from coverage.
• Shopping around: Different insurers offer different rates. Shopping and comparing quotes online allows drivers to get the best coverage at the best price.
• Waiting it out. Driving infractions do not stay on the abstract forever. However, motorists should avoid committing traffic violations, so their records can clear up.