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How to Reduce Car Insurance Premiums with Good Grades

January 17, 2018

Car insurance costs tend to be higher for school-aged drivers. Both high-school and even college students are considered at-risk drivers.

Fortunately, there are plenty of discounts offered by insurance carriers that help reduce insurance premiums for young drivers without sacrificing coverage, such as the "Good Grades" discount.

What you will learn:

Why Do Good Grades Get Discounts?

There's a reason why so many insurance carriers are offering some form of a 'good student' or 'good grade' discount.

One study published in Accident Analysis & Prevention found that "students with a C or D average were 49% more likely to get into an accident within their first year of having a driver's license than those with an A or B average."

Considering that younger drivers are at risk of being involved in accidents due to their inexperience behind the wheel, insurance companies reason that good students have a lower risk of being involved in a car accident. As a result, they are also less likely to file claims.

Insurance companies can thus pass along anticipated savings to these students by offering a "good student discount." The argument can be made that it's the driver that ends up saving money for the insurance company. 

Who is Eligible for the Discount?

The specific criteria that a young driver must meet in order to qualify for one of these discounts can vary. It's best to check with your insurance adviser to find out which discounts are available to you and what proof needs to be provided.

Some common examples of criteria that may need to be met in order to claim a discount for good grades include:

  • Being listed on the honor roll (for high school students)
  • Making it on the dean's list (for college students)
  • Earning a certain score on a standardized test (for home-school students)
  • Maintaining a certain GPA (usually an average of a B or higher)

Keep in mind that some insurance carriers will also have strict eligibility requirements for college students claiming this discount. For instance, some carriers may only offer the discount to full-time students or offer a smaller discount to those enrolled only part-time.

You'll also want to check your insurance carrier's website to find out what type of discounts they offer. Generally, you can expect a discount of 10-25%. 

How to Get Started.

If your child (or you) is eligible for a discount, the first thing you need to do is provide the required documentation to your adviser. In most cases, a current report card, transcript, dean's list or honor roll certificate would be sufficient.

However, keep in mind that most insurance companies will require you to provide this proof each semester in order to keep the discount applied to your premium with each renewal.

In this sense, if the student's grades drop, he or she may no longer be entitled to the discount. Or, if a student goes from full-time to part-time, he or she may either no longer be eligible or may receive an adjusted discount.

Additional Discounts for Young Drivers.

College Campus Discount
Another possible discount to keep in mind for younger drivers is a college campus discount, which provides policy holders with the ability to "suspend" coverage on a vehicle that gets left at home (and is not driven) while a student is away at college during the academic year.

Some carriers will offer discounts if your child goes to school over 100 miles from home and only occasionally drives your vehicle.

Monitoring Devices
Driving monitoring devices are offered by a number of carriers and can help you save money. These devices are designed to detect erratic driving behavior, such as sudden braking and rapid acceleration. If the monitor records good driving behavior, you can earn up to a 30% discount!

Safe Car Discount
Some companies offer discounts for cars with safety features such as anti-theft devices, lane departure sensors, anti-lock brakes (ABS) and collision preparation systems.

Driver Training Programs
Check with your personal insurance adviser to see if your carrier offers discounts for young drivers under 21 who show initiative by completing qualifying training programs.

Truth is, every one wants to reduce car insurance costs. Savings opportunities like the good student discount make it possible to enjoy the coverage young drivers needs at a reasonable price. That's insurance made simple!

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