Good Student Discount: What It Is, How It Works, Examples

What Is a Good Student Discount?

A good student discount is an auto insurance policy discount available to young drivers who earn good grades in school. Teen drivers aged 15 to 19 have the highest rate of accidents of any age group, which is why insurers tend to charge more to cover them. However, insurance companies assume that young drivers who are responsible when it comes to their studies are more likely to be responsible drivers. As a result, they are less likely than teens with poor grades to file claims on their car insurance, so they deserve to pay lower insurance premiums.

How a Good Student Discount Works

Car insurance policies protect you against damage from collisions, theft and other incidents. You'll pay regular premiums to keep your policy in place. In the event of an accident, you can file a claim to mitigate the costs associated with repairs and vehicle replacement.

Some insurance companies offer a variety of discounts on your premiums based on factors like your claims history and association memberships. One common option is a good student discount, which offers high school and college students a break on their premiums as long as they meet certain requirements. Insurers set their own eligibility guidelines, including age range, education status, minimum grade point averages, and any terms that may disqualify a student.

Good student discounts—and any other applicable rebates—are a boon to teens and parents in the United States, as car insurance for teen drivers tends to be more expensive than premiums for other age groups. That's because young drivers lack driving experience and are more likely to get into car accidents and commit traffic violations.

Requirements for a Good Student Discount

Insurers that offer good student discounts set their own rules and requirements. Typical requirements include:

• You must be under 25 years old
• You must be a full-time high school or college student
• You must maintain at least a "B" average or demonstrate a certain level of performance on standardized tests like the SAT or ACT
  

You typically need to provide proof of your academic performance to receive or continue receiving a good student discount. For instance, the insurance company may require a school transcript or a report card, and may allow alternative proof from homeschooled students. 

Examples of Good Student Discounts

State Farm offers up to a 25% discount on premiums to full-time students up to age 25 who earn good grades. GEICO offers up to 15% off certain coverages for full-time students who maintain a B average or better. If you're not sure whether your insurer offers a good student discount, it's worth asking to confirm the details.

The Bottom Line

A good student discount is one way for young drivers and their parents to save money on car insurance. To maintain the discount, the young driver needs to meet eligibility criteria including age, student status, and academic performance.