Car insurance is mandatory in most states. But just because it’s required doesn’t mean it has to be expensive. There are a lot of discounts out there for people looking to save on their auto insurance premiums.
Teens are notoriously expensive to insure. That’s why discounts for them can be the most valuable: saving even a little can add up until they age out of that "super bad drivers = super high premiums" phase they’re going through.
One incentive that can help them while they’re on the road and in the classroom are good student discounts, where higher grades mean lower premiums.
Good student discounts
The most common student discount you’ll find is one that rewards you for good grades.
At the risk of overgeneralizing, teens are horrible drivers. That’s why they have the highest insurance premiums of basically every demographic group. But the DMV says that teens who get good grades get into fewer accidents.
What does that mean?
Big savings for those who hit the books.
A quick look at some of the nation’s biggest auto insurers – Allstate, Geico, State Farm, USAA, and Nationwide – shows that they all have some form of good student auto insurance discounts.
Each insurer has their own guidelines for what qualifies as a "good student" but there are some common benchmarks and for the most part you can save if you do one of the following:
Rank in the top 20% of your class
Maintain a grade point average of at least a B or 3.0
Make the Dean’s List or Honor Roll
You’re usually eligible for these savings up to the age of 25, and it’s as simple as providing a report card, transcript, or administrator note to your provider when you’re applying for or renewing your policy.
But what about homeschooled students? Don’t worry, you’re covered, too. Insurers use standardized tests like the PSAT or SAT, and if a student is in the top 20% of test-takers nationally, they can get the same sort of savings that other students do.
Resident student discounts
When a student goes away for college, it’s time to ask a big question: what do you do with their car?
For many new university students, it can be either expensive to bring their car with them to campus or, in some cases, prohibited for underclassmen. But they still need a ride for when they’re home, right?
That might not be that often, though, and you might feel silly about paying full price for auto insurance when the car is only going to be driven a few times a year.
That’s where resident student discounts come in.
Also known as student away discounts, resident student discounts come into play when a student goes away but their vehicle stays behind. If the student moves away – most insurers have the minimum distance set to at least 100 miles – and won’t be using the car regularly, insurance can be had for a steep discount. Allstate, for example, advertises up to 35% off the premium cost.
Even if it’s only for a year or two until the student brings the car with her to school and starts using it regularly, that’s still a year or two when your auto insurance premiums can be reduced by a significant amount.
Driver’s education discounts
Driver’s ed is a rite of passage for a lot of teenagers in America. It benefits everyone: students learn to be good drivers and the rest of us get a little peace of mind knowing that they went through at least some training before they get behind the wheel.
It’s a great idea, and almost every state requires teens to take some sort of driver training course anyway. Turns out it can also save you money on your car insurance.
Most car insurers will offer discounts for the successful completion of a driver’s ed course.
These are usually only for students (you typically need to be under 21 years old) but for older drivers, defensive driving courses – sort of the same thing, but usually taken by people with a less-than-perfect driving record – can still net you a discount.
Alumni association discounts
Okay, so this is more of a post-student discount, but it’s still a great way to save money on auto insurance that everyone should know about, and depending on the program you might still qualify as a current student.
Many insurers offer discounts to people affiliated with certain groups: businesses, military, and so on. You can add alumni associations to that list, too.
The discount you can get depends on your school and your insurer. Alumni associations have a lot of perks with it comes access to other alumni and discounts on other products. You may already be paying for a membership and not taking advantage of everything that’s offered. Why not see if your current insurer has a partnership – or even look into if switching insurers will be cheaper (while still offering the coverage and services you need, obviously)?
If you aren’t already saving, you should get in touch with your car insurance carrier and see if you can’t work in one of these discounts. Plus, whether it’s getting good grades, becoming a more educated driver, or taking advantage of all of the perks of your alumni association, the benefits go far beyond lowering your premiums.