Being a young driver is no piece of cake. It is no secret that auto insurance premiums are often higher for college students. It does make sense due to insufficient driving history and a strong likelihood of getting into an accident.
But, at the same time, there is no way to prove that most college students are terrible drivers and pose a systemic risk when on the road. That is why insurance companies utilize specific equations that determine the average risk percentage typical for a specific group of people. This equation includes such factors as the duration of the coverage, auto ownership duration, and claim history. This way, the carriers determine the final price of every coverage.
So it is only natural that reducing the premiums is what every young adult is after when looking for a suitable auto insurance policy. But the good thing is that, with determination, college students can manage to cut the rates insurance companies typically charge. That is why it is not uncommon for students to apply for the good student discount.
Let’s take a closer look at how good student discounts work and examine the options young adults have when on the hunt for affordable car insurance.
What Is a Smart Student Discount?
Getting insurance discounts for good grades might seem bizarre. And yet, that is exactly what the discount is about — getting good grades.
The idea behind this type of student discount is that those performing better academically are less likely to cause trouble on the road and file claims. Besides, it is also an excellent incentive to succeed in school.
But how do you know how much you can save with the discount? The reality is you don’t because it depends on the insurance company offers and terms. The average good student discount typically reaches 7%, but it doesn’t mean that your behavior on the road should not be whiter than white.
It might sound like a perfect solution for every college student, except that all of them cannot get the highest grades. That is why every insurance company allows students to choose one of several car insurance discounts available on the market.
Choosing Car Insurance Discounts for Students
Getting affordable car insurance while you are in school can be challenging. Fortunately, you can be eligible for several types of car insurance discounts. Here are the options you can choose from:
#1. Good Student Discount
As mentioned before, this type of student discount is available to young people earning B+ grades and high test scores. Qualifications might differ but, generally, young people have to be in a specific age group, be full-time students, prove high educational results, and have academic achievements.
For instance, Nationwide good student discount is available to people under 24 with an average B grade. In this case, you need to present proof of your achievements and a report card verified by your school administrator. But bear in mind that the requirements of the Nationwide good student discount (as is the case with any other carrier) are subject to change.
Just to give you grounds for comparison, GEICO good student discount has somewhat similar terms. The main difference is that their student discount can reach up to 15% depending on the specific case and the coverage.
#2. Distance Education Discount
If you cannot afford a good student discount offered by the insurance company, you can choose one of the alternatives.
It is not uncommon to leave your hometown to study at a new school or university. If that is the case, a distance education discount is exactly what you need to keep your car insurance premiums low.
But, to be fair, this student car insurance discount is not exactly about helping out young adults. This discount is aimed at helping parents whose children left for school and left their family car at home. In other words, students do not own vehicles and use their parent’s cars when they’re at home during midterm vacations or summer breaks.
#3. Affiliation Discounts
Affiliation implies all kinds of organizations like sororities, military or alumni associations, honor societies, etc. Affiliation with any of these organizations can help you knock off the price of your car insurance.
For instance, if you joined the military, got deployed, and decided to pursue your education after returning home, you can try your luck and qualify for a discount. This way, you can get cheaper car insurance offers.
Another form of affiliation is joining training programs specifically designed for drivers. It is a relatively new way to cut insurance-related costs and get a really good deal.
Taking a safe driving course or just a regular class can help you get access to the Allstate student discount. Apart from the aforementioned discount options, the carrier also offers deals to students enrolling in their driving education programs. Other insurance providers also offer their training programs to young people under the age of 25. For instance, a Steer Clear program completion allows getting State Farm student discounts.
Let’s be fair: applying for good student discounts can be helpful, but the most efficient approach to keeping your costs adequate is to practice safe driving.
But here’s the thing: if you’re a young woman in your college years, you might find out that the rates you’re offered are smaller than the ones your male college mates might have to bear. Why?
It is an established fact that young men tend to pay more than female students for auto insurance. According to the Consumer Federation of America, auto insurance costs are typically higher for 20-year-old male students when compared to the costs young women of the same age pay.
Let’s face it: male students are riskier drivers. In 2019, there were twice as many accidents resulting in death with male students as drivers. It includes DUI, speeding, hit-and-run, and other accidents.
So ultimately, while good student discounts are available to every accomplished student regardless of their gender, there is much more to consider before applying.
Will the Insurance Provider Check My Grades?
If you want to get a good student discount, they sure will check your report card. Apart from that, you need to find out the list of requirements and ensure that you check all the boxes.
Is There a GPA Requirement to Qualify for a Discount?
Yes, there is. Here are the general requirements: your average grade should be B or a 3.0 GPA. Any other educational achievements are a plus.
Do I Have to Buy My Own Policy If I’m a Student?
No, you don’t. You can stay on your family plan regardless of your current location, whether you moved to another state or city for educational purposes or not.
What If I’m Homeschooled?
When it comes to student discounts, it might be an issue. However, some carriers allow homeschooled kids to apply for a range of student discounts.
If you couldn’t find this information on your carrier’s website, contact the company representative or visit their office.
Victoria is a Senior Content Writer at American REIA. She helps customers find the right educational material through easily-digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers the latest industry news and various insurance topics, including auto, home, health, and life insurance.