The notion of cheap car insurance for students is a bit of a misnomer. Few insurance companies are willing to really drop insurance premiums significantly until an individual attains 25 years of age. Until that time, most young drivers can expect to pay anywhere from $1500 to over $2,500 annually on car insurance—or well more than double what an older driver with a clean driving record will pay for comparable coverage. Even so, there are numerous ways that student drivers can reduce their monthly insurance premiums and keep costs down.
To understand how to go about obtaining cheap car insurance for students it pays to have an understanding of the reasons why insurance companies impose such heavy premiums on student drivers in the first place. According to the Centers for Disease Control and Prevention (CDC), motor vehicle crashes continue to be the number one cause of death for U.S. teens. In 2008, as many as nine students aged between 16 and 19 died every single day as a result of injuries sustained in motor vehicle injuries. On average, teen drivers are four times as likely to get into a deadly accident compared to older drivers, according to the CDC. The costs of such accidents can be crippling to insurance companies. One estimate from the National Highway Traffic Safety Administration (NHTSA) pegs the cost of accidents involving 15 to 20 year old drivers at a staggering $40 billion annually.
Given this reality it is easy to see why insurance companies are charging such high premiums on student drivers. At the same time though, many of the largest and most reputable insurance companies are willing to offer substantial discounts for students, who in their opinion, exhibit certain kinds of favorable behavior.
Because academic excellence is considered a sign of responsible behavior, many insurance companies offer discounts to students who maintain a grade point average of 3.0 (or a letter grade of B) or better in school or college. The requirements for such “Good Student” discounts and the amount of such discounts can vary by insurer. But generally speaking, the discounts are available to students who are placed in the top 20% of their class, have a GPA of B or 3.0 and are on the Dean’s list or honor roll. Typically the discounts apply to bodily injury, property damage, medical payments and comprehensive collision coverage. On average, insurance companies offer between 10% to 15% discounts to students who meet these requirements so it pays to shop around for an insurer who offers the best discounts for good students.
The choice of vehicle is another important consideration when it comes to cheap car insurance for young drivers costs for students. A student with a powerful sports car or an expensive automobile for instance, is very likely going to end up paying a proportionately higher insurance premium compared to a student who is using a more practical used car. Because insurance companies are very risk-averse, they are likely to attach a much higher premium in situations where they could end up having to pay the cost of replacing an expensive vehicle if a student gets into an accident.
Insurance companies also tend to look favorably upon students who voluntarily participate in a defensive driving or safety class. Many companies offer discounts of up to 20% to students who successfully complete a defensive driving or advance driver training course.
Several other options are also available for keeping the cheapest student car insurance costs down. Parents who include students in their policies can save valuable money on their premiums by taking advantage of infrequent student driver discounts. Such policies cover students only when they are actually likely to be using the family vehicle when they are at home for summer or winter break. Similarly, students who limit the use of their vehicles can take advantage of low mileage student driver discounts, though here again the amounts offered can vary significantly by insurer. Some insurance companies meanwhile allow parents to temporarily remove a student from a policy while the student is away at college.
Taking advantage of such discounts can help lower car insurance costs for student drivers by over 20% in some cases. But by far the most important thing a student can do to keep insurance costs down is to maintain a safe driving record. Students who get into accidents through their own fault, or are caught driving while under the influence of alcohol or drugs can find it prohibitively expensive to maintain the required insurance coverage on their vehicles. They are also likely to find it considerably harder to find inexpensive insurance even when they attain the age of 25.
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