All About the Good Student Discount for Car Insurance
Last Updated on November 5, 2020
Young drivers between the ages of 16 and 25 pay the highest premiums of any age group. This is hardly news to anyone that has a young driver on their auto insurance policy.
The reason that young drivers cost so much to insure is simply that they get into the most auto accidents. When talking about young drivers, it’s not a question of if they will get into a wreck, it’s when.
Obviously, there are some youthful drivers that will never get into an accident. Unfortunately, they still fall into the risky age group and will pay higher auto premiums.
The good news is that insurance companies have come up with a few discounts that apply just to this age group. These can help offset the increase in premium that they or their parents are paying for car insurance.
One of the most common discounts is the good student discount. Almost every insurance company offers some type of good student discount. Here are the requirements to receive it:
Good Student Discount Requirements
Licensed Driver: The age group for the good student discount falls precisely in line with the high-risk group of 16-25 years old. In order to even be considered for the discount, the student must be listed as a driver on the policy. This might seem obvious, but it’s worth mentioning.
It’s important to have any licensed drivers living in your household to be listed as drivers on your policy. If they aren’t listed and get into an accident, your insurance company could choose to non-renew you at the next policy period, or even deny the claim.
Full-time Student: The student needs to be attending school full time in order to qualify for this discount. A full-time college student is defined as someone who is enrolled in 12 or more credit hours each semester.
Good Grades: Almost every insurance company defines a good student as somebody with a 3.0 GPA, which is a B average. This will need to be proven by sending in the latest report card or transcripts. Depending on the company, you might only need to send in one transcript to start the discount, or they might want to verify this at every policy renewal.
If your student doesn’t quite have these grades, all hope is not lost. If they get a B average next semester, you should be eligible for the discount. It can start at any time once the B average is met. This can be a great incentive to study a little bit harder to get those good grades.
Homeschooled? If the student is homeschooled before attending college, most insurance companies are willing to still grant this discount. They will want to see some type of verification that the student meets the equivalent of a B average, but they shouldn’t have a problem providing this discount to homeschooled students.
After Graduation: Some insurance companies will let the good student discount stay on your policy until age 24 or 25, even if the student graduated one or two years prior to that age. The exact age will depend on the company, so you’ll need to ask yours.
Similarly, most companies will continue to offer this discount in graduate school. It’s less about the type of schooling, and more just about maintaining good grades while under the age of 24 or 25.
Bonus Discount: The Distant Student: Some companies also offer a distant student discount, which is separate and could be in addition to the good student discount.
Most companies will require that the student not have a car with them on campus in order to qualify for this. If they don’t have a car, then they’re not driving as much and aren’t as big of a risk.
This isn’t a big deal at schools like NYU, where most students go without a car anyway.
The last caveat to receive this discount is miles away from home. Most companies want the student to attend a college that’s 100 miles away from the home address.
How Much is the Good Student Discount Worth?
Each company offers a slightly different discount amount for good students, but you can probably expect between a 5% and 10% discount for that particular driver. The distant student discount varies as well but is usually about the same percentage.
An extra perk is that these discounts can apply to students who do have traffic violations or speeding tickets on their record. Having driving activity can really cause their premiums to skyrocket, so these discounts are critical in offsetting that increase.
If you have a good student that goes to college over 100 miles away and doesn’t have a car, you could save up to 20% or more off their premiums! This is a big savings for young drivers who show dedication and commitment to obtaining good grades.