Purchasing insurance as a senior can be depressing – you were used to paying low rates for years, and suddenly there's an increase. However, there are still many things you can do to lower your car insurance rates.
Best Car Insurance Rates for Students
Parents often worry about insuring their young drivers, as a new driver is a scary thing and the cost doesn't help! Young drivers often face the highest of car insurance rates because statistically they are the most likely to get into a car accident or file other types of insurance claims. However, if your young driver is a good student, they can oftentimes get a discount on their car insurance rates.
Car insurance companies, like all companies, are out to make money. If they have to pay claims, they are losing money. The higher the chances of your getting into an accident, they more likely they are to file a claim. Therefore, car insurance rates are based on formulas meant to calculate risk. These formulas are put together based on statistics and research. This research has found that young drivers are risky to insure. However, this research has also found that good students are less risky to insure, and less likely to get into an accident. These young drivers are likely more responsible and able to make better decisions (on average) than those with poor grades.
A student can save themselves or their parent's money by maintaining good grades. What constitutes "good grades" depends on the insurance company, although it is typically a B average or higher. However, good grades alone will not determine your car insurance rate. Credit history, vehicle type, driving record, and other factors still go into the formula. Therefore, it is best to keep all of these factors in your favor rather than relying on your grades. Similarly, if you have poor grades, you can still lower your car insurance rates by keeping these other factors positive.
Again, this depends on the insurance company, but many students can earn up to 15% off their car insurance premium – sometimes more! Some companies stager their discounts so that the highest of GPAs gets the best discount. Most companies will offer this discount as long as the full-time student maintains their grades, up to 25 years of age.
Also for students, many insurance agencies will offer a discount if you live away from home for school, but keep your car at home. If you can get around campus easily without a car, it's worth considering this option.
Not only does getting good grades save you money, but it also helps you academically an in your future career – it's a win-win!