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Do school grades affect car insurance?

Important facts to know...
  • Car insurance carriers may offer good student discounts
  • Certain carriers will exclude grades from their premium calculations
  • Student drivers with good grades are usually less likely to get into an accident

There are a variety of factors that are going to come into play when you go to purchase an auto insurance policy. As a student, you introduce a whole new set of variables for the insurance carrier to measure you on.

Think about what the insurance carrier is tasked to do when they are pricing auto insurance, especially when you are in such a young state as a driver.

They are trying to price you, as a risk, based on a much smaller sample size of driving when compared to someone who has been behind the wheel for 20 years or more.

One question that students always have is, “do my grades matter when it comes to buying auto insurance?”

The fact with younger drivers is that they are often tasked with paying far higher car insurance premiums than adults who have been driving for longer. The reason has always been that they are more prone to getting into accidents.

Due to the statistics of how these young drivers are usually behind the wheel, premium rates go up. There are plenty of options for young drivers to consider though as they shop the market due to factors some carriers consider, while others do not.

Compare car insurance quotes to find the lowest price on the coverage you need.

No Easy Answer

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There is no easy answer as to whether or not your grades are going to have an impact on your car insurance premium. Insurance carriers use all sorts of data in very different ways. They may use your grades for any of the following:

  • indication of risk
  • discount for good grades
  • no consideration

Some car insurance carriers will use the grades that you have received in school as an indicator of how high of a risk you are going to be behind the wheel and price your policy based on that as one of the factors in the calculation.

Some insurance carriers will help you by offering a discount for good grades.

Your car insurance premium is going to come out and be calculated to a certain dollar amount, then if you have good grades and prove that via a report card, they will offer you a discount of a percentage off of that premium price.

The third scenario here is that car insurance carriers will ignore your grades entirely. Even if you have had an A+ in every single class for your entire life, it may not matter to individual carriers.

In this example, they will be pricing your car insurance policy exclusive of what grades you are receiving in school.

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The Good Student Discount

The most common scenario that you are going to find is the insurance carrier offering what is known as the good student discount. This is a reward that can be offered from car insurance carriers to students in exchange for them getting good grades.

The discount is not just a goodwill gesture from carriers, though. Instead, it is a calculated decision that they make based on statistics.

Statistics and work by actuaries of these carriers have found over the years that when students get good grades, they are less likely to get into a car accident. Car insurance carriers know that, and they want to be able to take advantage of that and win the business of that driver.

In It for the Long-Term

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Car insurance carriers know that people usually do not switch car insurance companies. Most will stay with a car insurance company from when they are a teenager through adulthood.

This is yet another reason as to why carriers want to get students with good grades on their book of business now.

They want them locked into their car insurance carrier and will offer a discount to get them there.

The hope is that by taking on a bit more risk now and offering a lower premium overall for the coverage that you need as a student, you will stay with them when you are, in theory, a safer driving adult.

Car insurance companies are always in competition with one another to get the best risks on their books, those that pose the most favorable loss ratio to them. Consumers need to take advantage of that.

As a student, make sure that you are only looking at the carriers offering those good student discounts.

Use those grades to your advantage and save financially today and into the future as well. Price comparatively before buying car insurance, and you will benefit from it as a result. Enter your zip code below to begin comparing quotes today!

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