• Tips on How to Use Good Grades for Student Car Insurance Discounts

    Student car insurance is an issue of great importance for both parents and students. Young drivers almost invariably have higher insurance rates than older drivers. These high rates can prove overwhelming in some cases. But there are ways to reduce car insurance premiums for young drivers. One of the most significant is the student discount for good grades.

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    Like any other company, insurance providers are in the business of making money. They employ a large number of actuaries and other types of analysts to determine risk factors. These factors are weighed in complex calculations that determine the relative risk of insuring every applicant. One of these factors is student grades. Statistically, it has been shown that students who receive good grades are less likely to be involved in accidents than students with lower grades. The reason for this correlation is fairly obvious. Students with good grades probably tend to be more responsible and make better decision than students with poor grades. This may be a generalization, but generalizations are what insurance rates are based upon. They do not examine each applicant as an individual person. They see each applicant as a collection of statistics.

    Students can save themselves and/or their parents a good amount of money by keeping their GPA up. But it is important for students to understand that merely having good grades is not enough to ensure lower rates. The same criteria used to determine rates for other drivers apply to students. Credit history, driving history, and insurance history all come in to play. Nowadays most college students have credit cards. And while many high school students don’t have credit, it is becoming more common. Students need to be aware that using their card irresponsibly could actually result in higher insurance rates. Speeding tickets and accidents will also increase premiums. And while most students don’t have a great deal of insurance history, previous claims filed against their policies cause rates to go up. Male students must be particularly careful, because even with no negative incidents on their record their rates are going to be higher than those of their equivalent female counterparts. This may not seem fair but it goes back to the statistics. Research has indicated that young men are more likely to be involved in an accident or receive a speeding ticket than young women are.

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    In general, a good student discount can save you 15 percent or more on your insurance premiums. The threshold for these discounts is typically a 3.0 GPA, or a solid B average. In some cases larger discounts are offered to students with especially high GPAs. Most insurance companies will continue to offer good student discounts to any full-time student who maintains good grades up to the age of 25. While these discounts and their limitations may vary from company to company, the figures are pretty similar across the board.

    Obviously there are more significant benefits to getting good grades than saving money on car insurance. That said, lower rates are a legitimate benefit and the good student discount is a positive for all parties involved.

    Coverage options that are discounted are Bodily Injury, Medical Payments, Comprehensive, Collision and Property Damage Liability. Insurance companies will require proof, a copy of a report card or a letter from the principal will normally suffice. Insurance companies spend millions of dollars compiling statistics, and their research shows that good students tend to be much safer drivers, which is why offering the discount makes financial sense.

    Defensive Driving

    Passing a defensive driving course is also a great way to lower your premium. The savings is often in the 5-10 percent range. These courses are fairly inexpensive and often take only an afternoon. In some states, defensive driving courses can be taken online, which is both quick and convenient. Check with your insurance company to see if they offer this discount.

    Older Vehicle

    An older vehicle is cheaper to insure whatever the age of the driver. Young drivers can save money by passing on the new, expensive sport car. Driving a late model sedan can result in big savings.

    Safe Vehicle

    Driving a car loaded with safety features can be a money-saver as well. Insurance companies like air bags, anti-lock brakes and automatic seat belts. If your car has these features, be sure to ask for a discount.

    Clean Driving Record

    There is nothing more important to an insurance company than your driving record. Having a clean driving record will keep premiums at a reasonable level. If a young driver gets a speeding ticket, cited for reckless driving, or is found at fault for an accident, premiums can quickly spiral out of control. If you are the parent of a teen driver, set a good example, keep your own record clean and make sure they understand the consequences of a speeding ticket.

    Insurance for young drivers is never going to be cheap. Statistics show that young drivers get in accidents six times more often than more experienced drivers. Insurance companies price their rates accordingly. Getting good grades and following these tips can help keep your car insurance affordable.

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