Learning to drive is an important milestone that gives teens more independence and provides parents a break from being chauffeurs. But adding a teen driver or college student to your car insurance policy can increase your premiums dramatically.1 That’s because car accidents are more common among young drivers due to a lack of experience.2
Fortunately, many car insurance companies offer a good student discount, and you should consider this when comparing car insurance options for your teen.
Here’s what you need to know about good student discounts.
What’s a good student discount?
A good student discount is a premium reduction that some auto insurers offer to students based on their performance in school.
Research shows that car crashes are less common among students who get good grades. Because of the lower risk of a claim, insurers are able to provide a discount to good students.3
How to get a good student discount
While the process to attain a good student discount may vary from one insurer to the next, you’ll generally need to follow these steps:
Earn good grades. High school and college students can earn good grades by completing coursework on time and scoring well on exams. If your student is struggling, talking to the teacher or professor can help. You may also want to hire a tutor to work with your student.
Compare discounts. If you’re adding a young driver to your policy, it’s a good idea to get new rate quotes from a handful of car insurance companies. You should also call your insurance agent or research the discounts you may be eligible for so you can estimate your rate with each company.
Submit proof of academic achievement. Once you’ve chosen an auto insurance company, ask your agent about the good student discount process. Most car insurance companies will require you to submit a document that shows your student meets the requirements for the discount. A current report card should be sufficient. Some insurance companies may accept a signed form from your school administrator as another option.
Receive the discount. You’ll likely see the discount reflected in your next premium payment. If you paid an annual premium, you may receive a partial refund for the discount amount.
Renew your eligibility as needed. Each company has its own rules for renewing a good student discount, but your insurer may require you to submit a report card again when you renew your policy.
Companies that offer good student discounts
Each car insurance company has different rules for how students can qualify for a discount, but most companies require full-time enrollment, at least a B average, and for the driver to be younger than 25. Some companies allow homeschooled students to qualify in other ways, like scoring in the top 20% on a standardized test.
The table below provides a glimpse into good student requirements for several of the nation’s leading insurers.
Other ways teens can save money on car insurance
Insurance companies charge higher premiums when a teen driver is on the policy, meaning any additional savings are vital. Here are some additional ways teen drivers can reduce car insurance costs:
Compare quotes. The age of the drivers on your policy will affect your rates with any insurer, but some car insurance companies offer more generous rates to teens. Get a handful of customized quotes before purchasing a policy, and be sure to factor in the discounts you’ll be eligible for.
Choose your first car carefully. While a high school student may desire a flashy sports car, aim for a make and model with plenty of safety features. This vehicle will be cheaper to insure. If you have multiple cars on your policy, see if you can assign the youngest driver to the car with the lowest premium and make sure they drive that vehicle.
Add a teen driver to your family policy. It’s typically less expensive to add a young driver to a family policy than to buy a separate policy for your teen.
Enroll in a driver training course. Many insurance companies offer discounts for teens who have taken an approved safety course. Young drivers can also benefit from the additional practice and guidance.
Choose a higher deductible. Opting for a higher deductible will reduce your premiums, but make sure you have enough cash to cover your share of a claim.
Take advantage of other discounts. Many companies offer telematics programs your family can use to demonstrate safe driving behavior and potentially earn a discount. In addition, some insurance companies offer discounts to college students who are studying away from their vehicle.