Asking for a discount on your auto insurance has become as
commonplace as that question you may have asked on your first job:
“Would you like fries with that?”
Drivers love a side order of discounts with their auto policy,
and price breaks mean even more to younger drivers, who typically
pay much higher premiums than older drivers. According to the trade
group the Insurance Information Institute, insurers typically
charge drivers younger than 25 higher rates because they tend to
have more accidents than older, more experienced drivers.
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How young drivers can save
Multiple factors, besides your age, affect your car insurance
rate, and the types and sizes of available discounts vary from
company to company. However, these 4 premium-cutters for young
drivers are offered by many insurance companies:
- Good student discount. Most
insurance companies offer a discount for students who earn good
grades in school, based on the assumption that the discipline it
takes for academic success correlates with safe driving. It’s
common for these discounts to extend into graduate-school years.
Geico gives up to 15% off some coverages for full-time students as
old as 25 who are earning B grades or better. Allstate offers
discounts of up to 20% for full-time students with good grades up
to age 25.
- Student-away discount.
College students and high school students in boarding school who
live away from home without their car can earn a discount based on
the fact that they drive less and are therefore less likely to get
in an accident. Amica Insurance has a discount that increases as
the distance from home increases, reflecting the lower usage of the
cars that stay at home, says Lynn Malloney, an assistant vice
president with Amica in Lincoln, Rhode Island. Allstate offers
discounts of up to 35% for students who live at least 100 miles
- Legacy discount. Some
insurance companies offer a “legacy” discount for the young adult
children of longtime policyholders. For example, USAA has a
discount of up to 10% for policyholders who are under 25 and have
been covered on a parent’s USAA policy for at least 3 years.
- Alumni discount. If you’re a
recent college graduate and don’t qualify for a good-grades
discount (good reviews at work don’t count!) and you have a car
that’s with you instead of at your parents’ house, you can still
get a discount related to your academic career. Many colleges have
arranged special alumni discounts with specific insurance
Any discount you qualify for can make your car insurance
premiums more affordable — and help you avoid taking a side job
just to pay for your insurance.