Car insurance for a restricted licenses

Know your options for getting car insurance with a conditional license

A restricted, or conditional, driver’s license is when you have special conditions attached to your license. These conditions include lower speed limits or restrictions on what time of day you can drive.

The most common restricted licenses are learner permits and provisional licenses, but there are other situations where you might also have a restricted license. You may have a restricted license if your license has been suspended or if you have a medical condition that affects your ability to drive safely.

Conditions will vary between providers regarding restricted licenses. It's crucial to declare any restrictions applied to your license prior to taking out cover.

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Car insurance for a restricted license

The effect of a restricted license 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 restrictions on licenses help ensure that you can drive safely.

For example, the following restrictions help protect learner drivers:

  • You cannot exceed 80 km/h.
  • You are required to prominently display the bright yellow L on your vehicle.
  • You need to be accompanied by a full, unrestricted license holder while driving.

Similarly, all learner and provisional license holders, whether they’re on Ls or P plates, will have lower speed limits, have a zero alcohol limit, and depending on the state might have conditions around carrying passengers and driving at night.

These restrictions make driving a lot less dangerous than it would be otherwise. The same principle applies to other conditional and restricted license types, even when the restrictions are for driving with dementia or for traffic violations. Overall, this means that license restrictions will often have minimal effects on your car insurance premiums when compared to other factors.

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 licenses vary between states and different providers will often employ their own risk models.

Learner drivers and provisional licenses

As relatively inexperienced drivers, learners and P platers can expect higher car insurance premiums. However, a great deal of this is related to age more than license 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.

The exception is for learner drivers and provisional license holders over the age of 25. Here, there are no age-related loadings but one’s provisional license, or learner driver, status will have a more significant impact on premiums.

Restricted licenses following offenses

It’s not unusual for someone to be placed on a restricted license following a driving suspension. The following are some of the license restrictions that may apply, depending on your location:

  • Bail orders that you agree to as a condition of release.
  • A work license (QLD only) that you might be able to get if you have to drive for work.
  • An extraordinary license which is the WA equivalent of the work license.
  • The NSW professional-driver restricted license for professional drivers who’ve lost their licenses.
  • A hardship driver’s license for special circumstances.
  • Conditional licenses 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 license. Because the restrictions can vary so widely 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.

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 license, 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 license have a history of breaking traffic laws and are probably going to violate the terms of their license restrictions.
  • Another might operate under the assumption that a driver will follow the terms of their license and not directly raise premiums for a restricted license.

Depending on the insurer and the type of policy, a restricted license may or may not directly lead to higher premiums.

Restricted licenses 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 license 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 license. 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, instead of the restricted license.

Steps to get cover in place

Restricted driver’s licenses can have a significant impact on your driving habits. As such, it might be a good idea to re-evaluate your car insurance needs if your license now has conditions.

  • If you’ll be driving a lot less than you used to, it might be worth looking into pay as you drive car insurance. These can let you keep the benefits of comprehensive cover without needing to pay for a policy that you aren’t using as much.
  • If you know you’re a safe driver and feel that you have been mischaracterised for having a restricted license, telematic “black box” car insurance can track your driving and directly assign you a driver safety score based on how you actually drive.
  • Knowing which factors impact car insurance prices can let you adjust your cover accordingly, and keep costs down.
  • Car insurance discounts can be a straightforward and effective way of reducing your premiums to compensate for premium loadings you might be facing.

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Andrew Munro

Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

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