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UPDATED: Mar 13, 2020
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Car insurance is most expensive for teenagers and young adults. Until you have a few years of driving experience any car insurance company must rely on statistical information about other people your age in order to set your premiums. Unfortunately, young people are more likely to be involved in auto crashes than any other age group, so their insurance rates are comparably higher.
There are several reasons that young adults have a higher rate of accidents than older drivers. Teenagers are especially likely to be involved in alcohol-related crashes, possibly because they are afraid of getting caught drinking if they call for a cab or ask for a ride home from their parents. Teenagers and college students are also somewhat more likely to drive without seatbelts, speed or engage in other risky driving behaviors. Additionally, young drivers do not have the experience necessary to train their reflexes and response times to deal with a crisis, so they may not be as skilled at avoiding accidents.
What car insurance discounts are available for student drivers?
Fortunately, there are some insurance discounts available to high school and college students. One discount aimed specifically at young drivers is the good student discount, which rewards young drivers for good grades in school. You can receive this type of discount whether you own your own policy or are listed on your parent’s policy. In some cases, if a parent has multiple children on his insurance, multiple good student discounts could apply.
In order to qualify for a good student discount, you must maintain a GPA of 3.0 or above. This translates into a solid B average. Some companies will offer the discount for being placed in the top 20 percent of the class or being on the school’s dean’s list, but the 3.0 GPA is the most common deciding qualifying criteria for most students.
Each semester, you must send a copy of your transcripts or report card to your insurance company. These will be reviewed and, if you qualify, the discount will be applied to your car insurance. On average, the good student discount will save between 10 and 15 percent off of your auto insurance premiums for the year.
Not all car insurance companies offer a good student discount, but most major providers do. If you already have insurance, you can contact your agent or the insurance company’s customer service department to see if you can obtain this type of discount. If you are purchasing new insurance, you can fill out a quote online; the quote form will ask about any students in the household and their academic record, and provide you with an adjusted rate accordingly.
Why do good students get lower rates?
In some ways, your grades replace your credit score when applying for car insurance. Because most young drivers do not have established credit, car insurance companies gauge a driver’s responsibility by looking at the student’s academic record instead. Good students are generally more responsible and statistically have fewer accidents than those who get poor grades. Good students may also be more financially responsible and thus more likely to pay premiums on time.
What other discounts are available to students?
Whether or not you qualify for a good student discount, you may be able to save money on your car insurance through other means. Most companies will offer a discount for drivers who take advanced driver’s education courses, such as defensive driving. You can also obtain a discount by installing safety devices into your vehicle or agreeing to keep the vehicle parked in a garage or covered carport rather than in an open lot.
After several years of safe driving, your rates will begin to drop. The longer you have an insurance policy and the better your relationship with the insurance company is, the more likely you will be to qualify for discounts. Whenever your policy renews, be sure to ask your company about any additional discounts you might qualify for.
If your rates are still too high, you may wish to change your insurance company. You can begin the search for a new company online by filling out your zip code above to find a list of local car insurance companies and an idea of how much insurance will cost.