What Is a Good Student Discount?
A good student discount is an auto insurance policy discount available to young drivers who earn good grades in school. The good student discount assumes that young drivers who are responsible when it comes to their studies are more likely to be responsible drivers.
As a result, they (or their parents) deserve to pay lower insurance premiums since they are less likely than teens with poor grades to file a claim with their insurance company. Since teenage drivers face some of the highest insurance premiums due to their lack of driving experience and their higher accident and traffic violation risk, a good student discount provides yet another incentive to do well in school: saving money.
- Good student discounts reward high-school and college-age drivers who earn good grades with lower premiums on their car insurance.
- Individual insurance companies decide whether to offer a good student discount, and, if they do, set their own guidelines for the level of the discount and requisite grade-point average.
- Premiums tend to be higher for young males because they tend to be riskier drivers than young females.
- Completing driver education, driving safely, avoiding accidents and traffic violations, and piggybacking on a parent's policy are all good ways for young drivers to keep their premiums low.
Understanding the Good Student Discount
Individual insurance companies are free to decide whether to offer a good student discount and, if so, to set their own guidelines for those discounts. One insurer, for example, might offer a 25% discount on premiums to full-time high school and college students who earn good grades, defined as a B average or higher, until age 25. Another insurer might offer a 15% good student discount to unmarried drivers with at least a 3.0-grade point average in high school or college. GEICO, for instance, offers up to 15% on certain coverages for full-time students between the ages of 16 and 24 with a B average or better.
Any insurer who offers a good student discount will want to see proof of good grades as a condition for applying the discount. For homeschooled students who can’t show a traditional report card, insurers may allow alternative proof, such as SAT scores that are in the top 20% of the national average.
While a good student discount is helpful, insurers say the best way for young drivers to keep their premiums low is through safe driving. Avoiding accidents and traffic violations means avoiding the steep increase in premiums that can accompany these events. Being added to a parent’s policy rather than having one’s own policy can also save young drivers money through the multi-car discount.
Contrary to most people's belief that men pay more than women do for auto insurance, a 2017 study by the Consumer Federation of America found that the reverse is often true. However, the CFA also found that premiums for 20-year-old women were generally lower than for 20-year-old men. Young men are simply riskier drivers. In one study that analyzed gender and age differences in fatal crashes, male drivers ages 15 to 19 were more likely than female drivers of the same age to be:
- Involved in fatal crashes
- Speeding and driving outside their lane at the time of the crash
- Drinking alcohol and driving recklessly
- Charged with a serious violation, such as hit-and-run or manslaughter
Male teens also tend to drive with more passengers in the car. And compared with other age groups, teens and young adults often have the lowest rates of seat-belt use. In 2017, only 58.8% of high school students always wore seat belts when riding as passengers.
Because they are riskier drivers, young male drivers' premiums tend to be higher than those of young females.
- Choose a safe vehicle with electronic stability control
- Opt for higher deductibles
- Complete driver’s education
- Leave your car behind when you go to college
You can also look into graduated driver licensing (GDL) systems, which provide longer practice periods, limit driving under high-risk conditions for newly licensed drivers, and require greater participation from parents as their teens learn to drive. Research suggests that GDL systems, available in all states, can reduce both overall crashes and fatal crashes among 16-year-olds.