Getting your license for the first time?
I remember when insurance premiums for young drivers cost more than the vehicle. It wasn’t unusual for someone to pay $1,000 for a car and have to pay $6,000 for insurance. Thankfully, those days are over for newly licensed drivers in New Brunswick, provided you keep your driving record clean.
In January 2005, the First Chance Discount was introduced in New Brunswick. This applies to any one applying for their license for the first time, regardless of age. The purpose of this discount was to give new drivers a break on their insurance rates when they are starting out. There are 2 different scenarios for new drivers:
1. Adding a new driver to a parent’s policy
Many new drivers will start out using their parent’s vehicles to get their experience. If they do not have access to a vehicle full time, this is called an occasional driver. If there are enough vehicles on the policy for the new driver to have access full time, they will be rated as a principal operator. Parents will get a discount on the new driver’s part of the rates. New drivers will receive 3 years driving credit with no driver training and 6 years driving credit with driver training.
2. Starting a policy of their own
Whether you have been on a parent’s policy or starting our immediately with your own car insurance, you can still qualify for the First Chance Discount. As above, new drivers will receive 3 years driving credit with no driver training and 6 years driving credit with driver training.
In either situation, it is extremely important to keep you driving record clean. The insurance company will check your driving record every year for the first 6 years you are licensed. This is the length of time you can qualify for the discount. If your driving record is clean, you will keep your discount and your rates will remain lower.
What happens if I get a ticket or have an accident?
If you do happen to get a ticket, the discount will be removed from your policy and you will now be rated based on the number of years you have had your license. If this happens in the early years of getting your license, your policy could triple in price. Especially if you had driving training as the company would take away up to 6 years of driving credit.
If you have and at-fault accident, including going off the road due to weather, you would lose your 6 years of driving credit and start again at a “0” driving record. Each year you would work your way up and gain a year of driving credit until you reach your “6” star record again. If you are not at fault in the accident, if does not affect your rating.
Questions on new drivers? Call us at Pearson Insurance (506) 432-1550 or check our website https://pearsoninsurance.ca/research-center/real-life-situations/teen-will-drive-soon.
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