Good Grades Could Save Your Family an Average of $546 a Year on Auto Insurance Premiums

Good grades go far — and not just for your future education and career.

Auto insurance companies can offer good student discounts for young drivers, and — according to the latest LendingTree study — those savings can be significant. In fact, a 16-year-old driver on their parents’ policy could save an average of 10.9%, or $546.07, on their annual premiums.

Here’s what we found.

Key findings

• A 16-year-old driver on their parents’ auto insurance policy saves them an average of 10.9% on their premiums by qualifying for a good student discount. Premiums with good student discounts average $4,449.48, or $4,995.55 without. A good student discount saves an average of 18.5% on auto insurance rates in Vermont — the highest in the U.S. — followed by Wyoming (16.4%) and Kentucky (15.8%). Teen drivers’ good student discounts offer no savings in Hawaii and minimal amounts in North Carolina and Florida, at 2.3% and 6.0%, respectively.
• On average, good student discounts for 16-year-old drivers lead to $45.51 in monthly auto insurance savings, or $546.07 a year. Teen drivers in two states — Kentucky ($98.51) and Rhode Island ($92.10) — save their parents nearly $100 monthly by earning good student discounts. Louisiana ($81.68) ranks third. Once again, those in Hawaii ($0.00) and North Carolina ($7.42) save the least, with Pennsylvania ($23.95) joining the bottom three.
• Maine has the lowest average premiums with good student discounts, at $2,609.74 per year. It’s followed by Wisconsin ($2,692.65) and Vermont ($2,939.56). Conversely, premiums in Nevada with the discount average $7,274.97 — the highest by state. Nevada is followed by Louisiana ($7,054.15) and Rhode Island ($6,954.49).
• Of the insurance companies evaluated, Country Financial offers the biggest good student discount savings. Drivers with good student discounts via Country Financial save an average of 35.6% compared to those without. In a distant second, those with State Farm save an average of 21.7% with the good student discount. Meanwhile, our sample policies with Geico and Erie didn’t see any savings.

Good student drivers save average of 10.9% on auto insurance

It pays to do well in school. For a freshly licensed 16-year-old driver on their parents’ auto insurance policy, a good student discount could save an average of 10.9%. With the good student discount, insurance premiums average $4,449.48. Without, premiums average $4,995.55.

According to LendingTree auto insurance expert and licensed insurance agent Rob Bhatt, car insurance for teen drivers can get expensive, so every bit of savings helps. “A single 10% discount here or 5% discount there may not seem like much,” he says. “However, if you’re able to stack multiple discounts, they can add up to a significant amount.”

The percentage you can save varies by state. Good students in Vermont save the most, at an average of 18.5%. Wyoming and Kentucky are next, with average savings of 16.4% and 15.8%, respectively.

States with the highest % savings in annual auto insurance premiums with good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Conversely, being a good student doesn’t help in Hawaii — the state doesn’t offer any savings. Meanwhile, the good student discount only offers an average of 2.3% in savings in North Carolina and 6.0% in Florida.

Full rankings

States with the highest/lowest % savings in annual auto insurance premiums with good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Those savings translate to $45.51 a month, or $546.07 a year

Putting a dollar amount on those discounts, good students save an average of $45.51 on their monthly premiums across the U.S. That’s $546.07 a year. (Note: We first calculated annual savings, then divided that by 12 to get monthly savings, so your own calculations may yield different results.)

Just two states near three-digit savings: Kentucky ($98.51) and Rhode Island ($92.10). Behind that, Louisiana ranks third at $81.68 per month.

States with the highest $ savings in annual auto insurance premiums with good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Unsurprisingly, Hawaii ranks last again, with no savings. It’s followed by North Carolina at just $7.42 a month, with Pennsylvania ($23.95) in a distant third.

Full rankings

States with the highest/lowest $ savings in annual auto insurance premiums with good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Maine premiums lowest with good student discount

Auto insurance premiums in Maine average $2,609.74 per year when incorporating good student discounts — the lowest across the U.S. (Note: If Hawaii offered good student discounts, it would have finished No. 1 on this list — premiums without the discount average $1,565.24).

Wisconsin follows at $2,692.65, with Vermont ($2,939.56) rounding out the top three.

States with the lowest annual premiums after good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Meanwhile, Nevada has the highest average annual auto insurance premiums with a good student discount at a whopping $7,274.97. It’s followed by Louisiana at $7,054.15 and Rhode Island at $6,954.49.

Full rankings

States with the lowest/highest annual premiums after good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data. Note: Hawaii is omitted because it doesn’t offer a good student discount.

By insurance carrier, Country Financial offers biggest discount

As for the companies with the best good student discount, Country Financial offers the highest savings. Drivers with good student discounts from Country Financial save an average of 35.6% — the company charges $3,023.95 with the discount, versus $4,695.30 without.

Following, those with State Farm save an average of 21.7% with the good student discount. In third, those with Auto-Owners save an average of 20.0%.

Companies with the highest % savings in annual auto insurance premiums with good student discounts

Source: LendingTree analysis of Quadrant Information Services auto insurance rate data.

Meanwhile, some auto insurers didn’t offer any savings for our sample policy — namely, Geico and Erie. With that in mind, Bhatt says it’s crucial for drivers to shop around as they prepare to add a teen driver to their policy, even if they shopped around for their current policy.

While not all companies offer a sizable good student discount, Bhatt says it’s important to remember that a good student discount is not the only factor that determines the best price. “A company with a small good student discount or no good student discount at all may be cheaper overall if its base rates are already low to begin with,” he says.

For example, a good student discount with AAA Auto Club Group saves drivers an average of 7.7% — the fifth-lowest discount among the companies analyzed. However, its average auto insurance premiums with or without the discount are the lowest overall.

Adding young drivers: Expert tips on insurance discounts

Adding a teen driver to your car insurance is expensive. In fact, a ValuePenguin study found that adding a 16-year-old driver to an existing policy can add an average of $3,252 annually. And while teen drivers can buy their own auto insurance policy, it’s usually cheaper if they’re added to their parents’ policy.

With that in mind, Bhatt emphasizes that you should not overpay. He recommends the following:

• Start shopping around ASAP. “You can start shopping around for car insurance as your teen prepares to get their driver’s license,” he says. “The policy usually doesn’t need to take effect until the day that your teen gets their license.”
• Look for additional auto insurance discounts. “Beyond good student discounts, many companies also offer a discount to teens who complete an accredited driver training program,” he says. “Also, you can usually get another sizable discount by signing up for your insurance company’s safe driver program, if it has one. These are the programs that use a smartphone app to monitor your driving. You get an initial discount when you download the app and future discounts when you renew, provided everyone on your policy drives safely.”
• Try bundling your home and auto insurance. “If you’re not already getting your home and auto insurance from the same company, consider doing so,” he says. “This could get you a generous multipolicy discount for bundling.”

Methodology

LendingTree researchers gathered quotes for a 2015 Honda Civic EX driven by a married man and woman who are both 45 with clean records and good credit scores. Additionally, a 16-year-old child was included on the quote — both with and without the good student discount.

This study shows the average annual costs of a full-coverage insurance policy in all 50 states and the District of Columbia.

By insurance carrier, researchers analyzed quotes for the same family in Illinois. Researchers used Illinois because it is most representative of what an average state’s rates will look like.

The analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only, as your quotes may be different. Full-coverage policies include coverage limits above minimum requirements.

Full-coverage policy

Source

This article originally appeared on LendingTree and was syndicated by MediaFeed

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