Car insurance: The value of a good-student discount

Arlene Hauben

Getting good grades can pay off in the driver’s seat. Full-time high school and college students who earn better-than-average grades are eligible for car insurance discounts of 15 percent or more.

In most states, the good-student status is applied when the policyholder or driver is between 16 and 25 years old, and can meet one of the following requirements during the immediately preceding semester:

• Be a full-time high school or college student with a B grade point average or better.
• Be in the upper 20 percent of his or her class.
• Make the dean’s list, honor roll or comparable list indicating scholastic achievement.

The good-student discount is applied to these types of car insurance coverage: bodily injury, medical payments, comprehensive, collision and property damage liability.

Good students, lower risk

Studies conducted by car insurance companies show that good grades demonstrate responsibility. “Good students get a discount because their risk is not as great,” said Susan Stanley, an agent with State Farm in Boynton Beach, Fla.

To be approved for a good-student discount, school documentation must be presented to the car insurance company on the anniversary date of the policy, usually every six months. If you have an insurance agent, he or she should attach the student’s report card from the last full semester to the policy. A good student certificate signed by a school official also is acceptable evidence.

Stanley advises students who are drivers to maintain at least a B average. “Try to ace the class you are good in to offset any C grade you might get. The value of the good student driver discount is considerable,” she says.

At Liberty Mutual, for instance, a good-student discount can chop 15 percent to 35 percent off a car insurance premium.

Get things in order

The Richter family of Atlanta was able to get good-student discounts from Allstate for all three of their children as they progressed through high school and college. Deborah Richter notes that the academic paper work must be in good order.

“One time, our son’s name was cut off of the transcript and it was not accepted until it was re-faxed,” Richter says. “It is important to follow up with the insurance company or the agent to make sure everything goes through correctly.”

For their youngest child, the Richters were paying $802 every six months for his car insurance premium. Without his good-student discount, the premium for six months would have been $874.

Parents should encourage their teens and college-age children to take a driver training course in addition to getting good grades, experts say.

“Contact your insurance agent or company representative when your teen is about to get his or her learner’s permit,” says Jeanne Salvatore, senior vice president at the Insurance Information Institute. “Your agent will explain the costs involved in insuring a teen driver. The good news is, as your teenager gets older, insurance rates will drop — providing he or she has a good driving record.”