Teens pay a higher auto insurance rate because of that age group's accident statistics. National Highway Traffic Safety Administration studies show that on average, drivers under age 20 have more accidents, drive faster and are more prone to distractions than older drivers. However, several factors can help younger drivers reduce their rates, including being a good student. Hitting the books will save you significant money on your car insurance.
Good students can often get at least a 15 percent savings on insurance premiums. Depending on the carrier, this discount can go as high as 25 percent. Not all insurance companies offer a discount for good students, so shop around until you find one that does. If you're on your parents' insurance and your siblings also get good grades, you might not get the full discount. Discount rules vary by state and by insurance carrier.
According to insurance companies, students with good grades spend more time at home studying and less time driving. Insurance carriers say a good student makes better choices, which translates to better decision making on the road. A good student is also deemed more responsible, making her a better insurance risk than her less-studious friends.
According to Nationwide Insurance, you may qualify for the discount if you're a full-time student aged 16 to 24. You must maintain a B average or 3.0 grade point average and be able to prove it. A recent report card is enough to prove you qualify for the discount. Being on the honor roll or Dean's list puts you in the good-student classification. A note signed by a school administrator also works to get the discount. High college-prep test scores like the SAT, PSAT or ACT also serve as proof, and may be the best option for home-schooled students. If a test score is used, your score must be in the top 20 percent to qualify. If you get straight A's you might get an even better discount, though this varies with the insurer.
Keeping the Discount Active
If you get the discount, the insurance companies will require you to provide regular updates on your grades. Good-student discounts don't carry over automatically. If your marks drop below a B average, the carrier will take away your discount and you will pay the full rate.
If you're an older student going back to school, you won't get a discount no matter how good your grades are. However, your age will normally get you a cheaper rate than a younger driver would get; your marital status and driving record will also be factors here.
Al Bondigas is an award-winning newspaperman who started writing professionally in 1985. His print credits include the "Mohave Valley Daily News" and "The Mohave County Standard." Bondigas studied journalism at San Bernardino Valley College in California.