How to Qualify for Good Student Discount Auto Insurance

Though teen drivers’ parents know that insurance for their kids can be quite expensive, there are ways to cut down on the cost. One method is by having the teen qualify for a good student discount.

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However, while offers directly marketed for student or teen drivers certainly benefit the family budget, or a teen’s savings, students can slash their rates other ways, too.

Qualifying for a Good Student Discount

Insurance companies have conducted countless studies about teen drivers. What these have shown is that good students also tend to be more responsible behind the wheel. They have fewer accidents and take fewer risks.

As a result, almost every car insurance company offers a discount to drivers under the age of 25 who are good students enrolled in high school, college, university or a technical school. Each company sets its own definition of what “good student” means which is usually related to how well you’re performing in class. Typically, this means having an A or B average or a GPA of 3.0 or above. Some companies require college students to be on the dean’s list. Others require certain scores on standardized tests.

With many companies, all you have to do is tell the company that the student has met the requirement, but others want documentation. This could be a copy of a report card, test score or letter saying the student is on the dean’s list. Even if the company doesn’t ask for this right away, they have the right to do so at any time, so keep copies.

A good student discount is usually around 10% to 15% percent off the teen’s premiums, though some companies give as high as 20%.

When a new teen driver can easily cause his parent’s premium to more than double, this is a nice deduction.

Monitoring Device Discount

Some companies offer discounts when their clients utilize a monitoring device in their cars. When they demonstrate a history of safe driving, they receive reduced rates. Realizing how beneficial this could be for teen drivers, many companies are implementing special teen programs.

This can be beneficial in a couple of ways. First, if you have a teen who is a responsible driver who doesn’t speed, drink alcohol and is generally mature with the vehicle, he’ll receive a discount.

Without the monitoring system, he would have no way to prove that, but this technology allows companies to differentiate the reckless teen drivers and the responsible ones.

Second, being monitored, most teens will be even more careful behind the wheel. Accident and ticket rates for drivers with a learner’s permit and a parent in the front seat are almost negligible. While the monitoring system isn’t quite as good as having a parent in the car, it can hold the teen more accountable for his or her driving habits.

Discounts While away at College

Not all parents realize this, but if your teen goes off to a college or university that is more than 100 miles away, the insurance on your teen or young adult can drop dramatically if he or she doesn’t bring a car to college.

Because he won’t have frequent access to a car, carriers will usually discount the family’s premium. Since the teen won’t be driving nearly as much, there’s less risk he’ll be in an accident. He’ll still be covered when he comes home and uses your car, but it can save money if he’s on campus without a vehicle.

Discounts on the Car

Don’t forget that the car the teen drives has a tremendous impact on premiums. Of course, the cheapest way to add a teen to the policy is not to buy him or her a car. Rather, it’s to add your teen as a secondary driver to your cars.

However, sometimes this isn’t practical. Sometimes, it’s worth paying extra insurance for teens to be able to drive to school, sporting events, and other activities. If this is the case, research which cars you should allow your teen to have.

It’s not uncommon for teens to worry more about how a car looks, how fast it is, or how many friends he can get into it than any other consideration. However, parents need to look at things like safety and cost. Moreover, don’t forget that safety features, as well as anti-theft features, usually result in discounts on auto insurance.

U.S. News says that safety, not fuel economy, cost of the car, or speed of the engine, should be the number one priority when getting a car for a teen.

According to multiple crash tests, vehicles that fit this description are usually mid-size to large four-door cars and SUVs.

Drivers of these vehicles are the least likely to die in a crash than in any other vehicle. This includes small four-door cars and sports coupes that tend to be particularly popular among teens. In addition, look for advanced technologies, like seatbelt reminders, that can help.

While the seatbelt reminder can be especially annoying, it can save a teen’s life, as teens have the lowest rate of seat belt usage, according to the Centers for Disease Control and Prevention.

Sports cars are a particularly bad choice for a teen. Even older drivers pay more in insurance on them because they are seen as an inducement to break speed laws. Put a young driver in one, and you’ll see even higher insurance rates.

Why Teens Pay So Much in Insurance

While getting a license is an exciting time of life, it can be a frightening one for parents. The CDC reports that 16- to 19-year-old drivers are four times more likely to have a traffic accident than any other group. Each year, thousands of teens are killed on our roads. In fact, car accidents are the number one cause of death in teens.

Not only do these numbers scare parents, but they also scare insurance companies. With each of these crashes, the amount of money they will have to pay out goes up.

Because of this high crash rate, insurance companies charge more in insurance, as their risk in insuring teens at all is higher.

In recent years, most states have instituted graduated licensing programs. These have reduced the number of fatal crashes involving teens, especially 16-year-olds, by as much as 40%.

In the past, most states allowed a 16-year-old to get a full driver’s license with no restriction, though some states required a driver’s education course first.

In an effort to prevent some of the most common situations that cause teen traffic accidents, most states have adopted changes in the rules for obtaining a driver’s license.

In nearly all states, the graduating driver licensing program, according to Advocates for Highway and Auto Safety, includes a minimum six months in which the teen must have a permit before getting a license. During this time, there is now a higher number of hours of supervised driving required before the license can be received. While the number varies from state to state, it is usually between 30 and 50.

Once the teenager receives the driver’s license, he or she still has restrictions on it. Though the teen no longer needs a driver in the front seat, he or she usually is limited as to the number of passengers allowed in the vehicle on one trip, though some states make exceptions for family members, like siblings.

In addition, the teen usually is restricted from driving during certain times at night and may be banned from cell phone usage on the road.

At age 18, all these restrictions disappear, and full privileges are allowed. These changes have saved countless teen lives since the states have begun to adopt them. Check your state’s laws to determine procedures in your area, as regulations are regional.

More Ways to Save

In addition to the discounts already mentioned, look at the deductibles you are carrying. If you can do so, raise them. While $500 is better than $250, $1,000 is best. Doing this, you can save as much as 40% on comprehensive and collision insurance. Just be sure you save that amount for a day when an accident occurs. With a teen driver, that could be any day.

In addition, make sure you are taking advantage of every discount for which you are eligible. This would include things like a multi-policy discount for having your homeowners and auto insurance from the same company.

Doing this can result in a rate reduction on your auto insurance, as well as about a 15% discount on homeowners insurance.

Take some time to shop around for quotes suitable for your teen driver.

Not all companies charge the same for teen drivers, so it’s worth a few minutes to look around and see if there’s another policy that’s cheaper.

One thing the Insurance Information Institute warns not to do is to lower your liability insurance. It might seem like a good way to save money, but it’s shortsighted. Let’s face it: You have a teen driver who is more likely to cause an accident. In fact, the Institute suggests raising your liability limits at this time.

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