It's no secret that new drivers pay more for car insurance. Their lack of experience behind the wheel means insurance companies consider them a higher risk.
However, there are ways teenagers can save money on car insurance. Most insurance companies offer car insurance discounts designed specifically for young drivers. If you have good grades and complete a qualifying driver’s education course, you might pay less for insurance. It’s also possible to reduce premiums if you leave your car at home when you go to college.
Let’s learn how you can get a better rate on your insurance by taking advantage of student discounts.
Why Are Students More Expensive to Insure?
Young drivers are more likely to get into a crash when compared to drivers with more years behind the wheel, according to data collected by the National Highway Traffic Safety Administration (NHTSA), so insurance companies often charge them more for their policies.
Drivers between the ages of 15 and 20 are more likely to:
- Drive while distracted
- Make mistakes on the road
Lack of experience isn’t the only risk factor for young drivers. People in this age group are also known to take risks while driving, operate a vehicle under the influence of drugs or alcohol, and not wear seatbelts.
NHTSA statistics show that for every 100,000 drivers, 19.81 young females and 45.7 young males got into a fatal crash in 2019. Combined, young drivers accounted for 7.8% of all fatal crashes that year. Since teenagers represented only 5.3% of all licensed drivers, these numbers are disproportionate compared to other age ranges.
Because they’re at a higher risk for an accident, teens are more expensive to insure. This means car insurance companies often charge higher premiums for drivers in this age range.
However, car insurance companies know that not every young driver will get into a crash. That’s why many insurers offer discounts specifically for qualifying students.
Good Student Car Insurance Discounts
Achieving good grades takes effort and demonstrates responsibility. And, since you’ll typically spend more time studying to keep your grade point average up, you won’t have as much time to goof off in a car. That means you’re less likely to get in a crash.
Insurance companies know this, so they offer a good student discount for young drivers who work hard in school.
While the exact terms of the good student discount vary from company to company, a common requirement is for you to maintain a B average or a 3.0 GPA. If you have good grades in high school or college, check with your insurance agent to find out if you qualify.
Depending on your insurer, you may need to provide proof of your academic success. This could be a report card, transcript, or a form filled out and signed by your school administrator. You may need to submit standardized test scores instead of a report card if you're homeschooled. Your insurer might ask for your ACT or SAT scores.
If you qualify for this discount, make sure you continue working hard at school. You may have to resubmit proof of eligibility regularly. If your grades start to go down, your car insurance rates could increase.
Good student discounts aren’t available in every location by every insurance company. Check with your agent to see what’s available in your state.
How Much Is a Good Student Discount?
Here’s a look at the average good student discount offered by three large insurance carriers. The dollar amount of the discount would depend on the amount of your premium.
While good student discount amounts vary from insurer to insurer, it’s often between 5% and 25%. See with your insurer how much you can save.
|Insurer||Good Student Discount|
Other Student Discounts for Car Insurance
Getting good grades isn’t the only way to save money on your car insurance as a young driver. Here are some other options that may be available to you to lower your premium.
Student Away-From-Home Discount
If you don’t bring a car with you to campus, you may qualify for a discount because you’re not driving as often. Some insurers offer this discount if you’re a college student living more than 100 miles away from home.
Driver’s Education Discount
Driver’s education courses can help you learn how to drive safely. They can help improve your situational awareness, so you’re more likely to avoid accidents. You may qualify for a discount if you’ve taken an approved course.
Simply taking a local driver’s education course may not count for this discount. You might need to take a specific course, so ask your insurer for the details.
Safe Driver Discount
No matter how old you are, the best way to save money on car insurance is to drive safely. If you don’t get in any accidents or get speeding tickets for a certain amount of time, you may qualify for your insurer’s safe driver discount.
While you won’t qualify for this discount right away, keep practicing safe driving and you could see your premiums decrease over time.
College students who are members of a sorority, fraternity, or honor society might also qualify for discounts. If you are member of one of those organizations, see if your insurer offers any savings.
How Students Can Save on Car Insurance
To ensure you aren’t paying too much for your car insurance, talk to your agent about any student discounts you may qualify for. You may not be aware of all your options or you many not automatically get the savings, so getting personalized advice can help you save money.
Additionally, it’s often cheaper for you to be added to your parent’s or guardian’s plan instead of purchasing your own policy. It also lets you take advantage of additional savings, such as the multi-policy discount. But if that’s not an option, take time to shop around. That way, you can find a policy that’s right for you.
National Highway Traffic Safety Administration. “Teen Driving.” Accessed Feb. 14, 2022.
National Highway Traffic Safety Administration. “Young Drivers.” Accessed Feb. 14, 2022.
Youth.gov. “Factors that Increase the Risk of Crashes.” Accessed Feb. 14, 2022.
California Department of Insurance. “What They Don't Teach You in High School.” Accessed Feb. 14, 2022.
Nationwide. “Good Student Discount on Car Insurance.” Accessed Feb. 14, 2022.
State Farm. “Car Insurance for Teens - State Farm.” Accessed Feb. 14, 2022.
Progressive. “Car Insurance Discounts & Info for Students.” Accessed Feb. 14, 2022.
Geico. “We Offer Car Insurance Discounts for Students - Get Yours.” Accessed Feb. 14, 2022.
American Family Insurance. “Good Student Car Insurance Discounts.” Accessed Feb. 14, 2022.