A restricted or conditional driver’s licence is when you have special conditions attached to your licence. This could include the type of vehicle you can drive or restrictions on what time of day you can drive, among others. Your car insurance rate will depend on the reason for your restricted licence, among other factors.
How does car insurance work with a conditional licence?
The most common restricted licences are learner’s permits and provisional licences, but there are other situations where you might also have a restricted licence. Two other common situations include suspensions or medical conditions that affect your ability to drive.
Do I need to tell my insurer if I have a restricted licence?
Yes. If it increases the likelihood of a claim occurring, you are legally obligated to let the insurer know about it. The only exception is if they already know about it, in which case you have nothing to lose by telling them anyway.
What do restricted licences mean for car insurance premiums?
Premiums depend on a variety of factors. Factors like your location, age or the type of car you drive will dwarf the direct impact of a restricted licence on your premiums. It’s the factors related to your restricted licence, rather than the licence itself, which affect your premiums.
How to get car insurance with a restricted licence
The effect of a restricted licence on your car insurance depends on the reason behind the restriction. In many cases, the effect might not be as substantial as you think. This is because the licence restrictions are designed to help ensure that you can drive safely rather than to penalize you.
For example, the following restrictions help protect new drivers:
Must be accompanied by a full, unrestricted licence holder while driving.
A curfew, after which night driving is not permitted
Restrictions on the number of passengers below a certain age in the vehicle
Similarly, most learner and provisional licence holders have a zero alcohol limit, and depending on the province, might have conditions regarding the number of passengers and driving at night.
Considering new drivers’ lack of experience on the roads, these restrictions make driving a lot less dangerous than it would be otherwise. The same principle applies to other conditional and restricted licence types, even when the restrictions are for driving with dementia or for traffic violations. Overall, this means that licence restrictions will often have minimal effects on your car insurance premiums compared to other factors like driving history or choice of vehicle.
Note that the information in this guide is general in nature. It may not necessarily be accurate for all car insurance providers or in all locations. Conditions placed on restricted licences vary between provinces and different providers will often employ their own risk models.
Car insurance with a provisional licence
As relatively inexperienced drivers, those with learner’s permits or provisional licences can expect higher car insurance premiums. However, a great deal of this is related to age more than licence status. Drivers under 25 can expect significantly higher car insurance premiums simply because they will (almost) never have more than a few years of driving experience.
Car insurance with a restricted licence due to a suspension
It’s not unusual for someone to be placed on a restricted licence following a driving suspension. The following are some of the licence restrictions that may apply, depending on your location:
Bail orders that you agree to as a condition of release.
A work licence for job duties that require driving or getting to & from work
A hardship driver’s licence for special circumstances.
Conditional licences after you have returned from a suspension.
The impact of the offense on your premiums will depend on the nature of the violation, the insurer, and the conditions of the restricted licence. Since restrictions can vary and are often applied on a case by case basis, they will rarely have a direct effect on your insurance premiums. Instead, it’s the peripheral factors that you should be aware of.
For example, someone with previous DUIs might be required to install an alcohol interlock in their vehicle, theoretically preventing them from driving at all when over the limit. An insurer might consider this to mean there is zero risk of future DUIs but will still raise your premiums. The raise is not because of the restricted licence, but because the insurer thinks that people with previous DUIs are more likely to get into accidents.
The same might also apply to other offenses. There’s no denying that both speeding and alcohol have significant impacts on driver safety and increases the insurer’s risk.
A more risk-averse insurer might take the view that people with a restricted licence have a history of breaking traffic laws and are probably going to violate the terms of their licence restrictions.
Another might operate under the assumption that a driver will follow the terms of their licence and not directly raise premiums for a restricted licence.
Depending on the insurer and the type of policy, a restricted licence may or may not directly lead to higher premiums.
Car insurance with a restricted licence for medical reasons
Often, these won’t have a major impact on your premiums.
If someone knows they have a medical condition that impacts their ability to drive safely, they are required to inform their state roads authority. If they don’t, they are driving illegally under the terms of their policy, and the insurer may refuse to pay a claim.
If you have a valid driver’s licence that is restricted for medical reasons, it usually means you have recently been assessed for your ability to drive safely. In some ways, this makes you a safer driver than most other people on the roads.
If your medical condition does affect your car insurance premiums, it is likely for reasons not directly related to your restricted licence. For example, some medical conditions might require you to drive a more expensive modified vehicle, and your premiums might be higher as a result of that.
You can still get car insurance with a restricted licence, but you might pay higher premiums depending on the reason for your restriction. Compare your car insurance options to find the best rate for you.
Andrew Munro is the cryptocurrency editor at Finder. He was initially writing about insurance, when he accidentally fell in love with digital currency and distributed ledger technology (aka “the blockchain”). Andrew has a Bachelor of Arts from the University of New South Wales, and has written guides about everything from industrial pigments to cosmetic surgery.
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