When people told you that studying would pay off, lower auto premiums probably weren’t the first thing you thought of.
But good student discounts are available from most insurers and can help offset high premiums, especially when you’re dealing with the cost of car insurance under 25.
How does a good student discount work, and are you eligible?
What is a good student discount?
The terms vary from company to company but generally, you’ll get something in the region of 10 percent off your premiums.
To qualify you normally need to be between 16 and 24, and be a full-time student in high school, college, or a home study program.
To demonstrate that you’re a good student you will need to show your insurance company some evidence, this could include things like:
Being in the top 20 percent of your class
Averaging a B grade or higher
Scoring higher than a 3.0-grade average
Being included on the dean’s list or honor roll
Score in the top 20 percent for standardized tests such as the PACT or PSAT
These are just some of the examples of how you could qualify for the discount, check with specific insurers to find out their full requirements.
To prove your credentials you will need to show official documentation, either from your school, or the scores for your tests.
Can I get a discount after I’ve left school?
Insurance companies may limit how many years you can use your good student discount — for example, two years in high school for drivers aged 16 to 18, and then four more years for a typical bachelor’s degree at a college or university.
To find out the rules for this discount with your provider, contact an agent.
Which coverage does a good student discount apply to?
Watch out when comparing the discounts between companies. Not every company will apply the student discount across the board. For example, you might only qualify for the discount if you buy comprehensive coverage rather than a liability-only policy.
The discount amount also can depend on such factors as coverage levels and the number of vehicles and drivers on a policy.
What happens if my grades change?
Getting a good student discount isn’t a one and done type of deal. To keep getting it, you will likely need to keep your grades up. This could mean submitting proof to your insurance company every year or when you renew in order to stay eligible – so if you no longer qualify you may not get the discount.
Are there other discounts I’m eligible for?
Potentially. There are a few other key discounts you can look out for to help get your premiums down.
Good driver discount
Most insurance companies offer a good driver discount. The discount usually splits into two forms:
1. The accident-free discount customers get lower rates if they go a certain number of years without an accident.
2. The violation-free discount is available to drivers who haven’t had any major violations for a set number of years.
Depending on the company, they offer one or both. If you think you’re eligible talk to your agent to make sure you’re getting your discount.
Sorority or fraternity discounts
As well as being eligible for a good student discount your sorority or fraternity might entitle you to extra savings. For example, Auto-Owners has a list of groups whose members can get a discount on its website.
Distant college student discount
If you’re going to college further from home (usually at least 100km away) but you’ll stay insured on a parent’s car you may qualify for the distant college student discount.
Essentially what this does is reduce the cost of insuring you since you won’t be around to drive the car as much — it will only be times like when you’re home for the holidays or other school breaks.
Can I stay on my parents’ insurance?
It depends. If you’re at college or living with parents you may be able to remain on their policy.
Can you stay on your parents’ car insurance if you move out for any other reason than college? That’s trickier.
Some insurers have greater flexibility or acceptance of young adults staying on parent plans a bit longer. If you’re considered a dependent, you can stay on your parents’ car insurance. Insurance companies may define “dependent” in slightly different ways.
Usually, you’re considered a dependent if you attend college and/or live at home, or at least part-time (i.e., during summer and winter breaks) or drive a car that your parent owns and insure.
But in the case that you still live at home and buy a car, if you are considered the vehicle owner, then you’ll probably need to purchase your own car insurance.
Other ways to get your rate down
Even if you’re not eligible for a good student discount, or any of the other discounts mentioned above, there are still a few things you can do to help lower your premiums, such as:
1. Shop around
Different insurers decide their rates in different ways, so your situation might lead to better rates with one company than another.
The only way to know you’re getting the best rate is to let us shop for you.
2. Bundle Your Policies
If you have homeowners or renters insurance, ask about bundling it together with car insurance from the same carrier to get a discount.
3. Raise your deductible
There’s a direct relationship between paying lower premiums and having a policy with a higher deductible. This makes it a straightforward route to lower auto insurance costs.
Remember that if you do get in an accident, the money you might have saved from lower premiums would quickly be offset by the higher car insurance deductible since you will need to pay this portion yourself.
4. Reduce types of coverage
Figure out what types of car insurance you need, and only pay for those.
For example, once your car reaches a certain age or gets enough miles on the clock, the depreciation means having a full coverage policy isn’t worth it.
If you have an older car (itself another way to potentially save money), then consider the trade-off between liability vs. full coverage as a way of potentially reducing costs.
Other Insurance Products offered at The Fulcher Group:
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