Good Student Discount

What is 'Good Student Discount'

An auto insurance policy discount available to young drivers who earn good grades in school. The good student discount assumes that if a young driver is responsible when it comes to their studies, they are more likely to be a responsible driver. As a result, they deserve to pay lower insurance premiums since they are less likely than teens with poor grades to file a claim with the insurance company. Since teenage drivers face some of the highest insurance premiums due to their lack of driving experience and higher accident and traffic violation risk, a good student discount provides yet another incentive to do well in school: saving money.

BREAKING DOWN 'Good Student Discount'

Insurance companies are free to decide whether to offer a good student discount and, if so, to set their own guidelines for those discounts. For example, one insurer 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.

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.