Higher grades can mean lower premiums for teen drivers


Adding a teen to your auto insurance policy will lead to a hike in your premium.
That's because teen drivers pose a double threat to a potential insurer: their immaturity, which increases the potential for reckless behavior, is coupled with a lack of real driving experience, according to the Insurance Institute of Highway Safety. Their crash rate (which peaks at age 16) is four times higher than that of drivers over 20, according to the highway safety institute, and teens account for a disproportionate share of the thousands of fatal crashes each year.

Despite these grim statistics, many teens might argue that they shouldn't be subject to sky-high insurance rates because of what their less responsible peers do on the road. Before establishing a clean driving record that speaks for itself, these teens can take advantage "good student" discounts, offered by many auto insurance companies.
Good student discounts give teens an incentive to hit the books by offering premium discounts in exchange for good report cards. Students with higher grades are considered less risky than those with subpar ones because, in the eyes of an insurer, good students have demonstrated a track record of maturity and responsibility.
Some of the biggest auto insurers across the United States offer these discounts. Nationwide, for example, rewards students who have a B average or higher with a 15 percent premium discount. GEICO offers a similar discount for the same average grade, according to the company's website. A fact sheet from State Farm in South Dakota provides a more detailed list of requirements. In addition to being under 25 and a full-time student, those eligible for a good student discount must be able to prove at least one of the following:
  • Ranking in the top 20 percent of his or her class.
  • Grades with a B average or higher.
  • A GPA of at least 3.0.
  • Inclusion on the dean's list or honor roll.
How do eligible students prove to insurers that they have earned their discounts? AAA Texas requires that students provide their latest report cards or transcripts. Those who don't have these documents can have a school official sign AAA's Academic Achievement Certification Form.
With all of this information in hand, students who have done their homework can save money while building up good driving records that will trim auto insurance rates.

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