Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Apr 14, 2022

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In a nutshell...

  • Grades are not a factor in qualifying for car insurance and they do not determine your standard rate
  • However, you may get a good student discount if you meet the qualifications
  • Shop and compare and apply for insurance discounts when shopping for insurance

There is a lot of confusion on how car insurance companies decide on what premiums drivers pay for auto insurance.

Some people think that they base their decision solely on your age while others think they check your grades from your high school or other factors to decide what to charge you.

Neither of these things is true. While your age and other demographic factors do affect insurance rate to some extent, they are not the only factors that affect your premiums.

Also, insurance companies almost never check your school grades, unless you are applying for a good student discount and you ask them to do so.

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What are my premiums based on?

Premium amounts are based on a number of factors. Your age, marital status, and place of employment can influence your premiums to some extent. The most important factors that insurance companies use to decide on your premium are listed below.

  • Driving record  If you keep your driving record clean, you will be more likely to keep your premiums down. You accumulate points on your driving record for moving violations and accidents and this is what insurers use to rate your insurance policy and assign your premium amount.
  • Age and other demographics  Married people tend to have fewer accidents than those who are single from a statistical viewpoint. People in the younger age bracket tend to have more accidents than older drivers. All of these factors can influence the premiums you pay based on the status of these factors at any time.
  • Make, model, and year of your vehicle  Newer cars tend to cost more to insure while older cars may cause your premiums to drop. Some car finance companies require that you carry collision insurance until you have paid off the debt or until your car is five years of age.
  • Mileage driven in a year  Insurance rates are also based on the number of miles you drive your car in a year. The fewer miles you drive, the less your premiums will be because your risk is lowered when you drive less.

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Applying for Discounts

Some insurance companies offer special discounts military personnel or teachers. Some companies offer “good student discounts.”

A good student discount allows you to save on your insurance premium based on your grades of a “B” average or better. This discount is the only time that an insurance company might look into your grades.

If you are in high school or in college as a full-time student, you may qualify for a good student discount.

There are many different discounts available so ask your insurance representative when you apply for insurance to check and see if you qualify for any of these reductions in premium. Don’t make the mistake to think that you do not qualify for any discounts. Shop around, compare insurance quotes and see what rates are available.

What about international students? Unfortunately, as auto insurance normally only covers a driver in his or her home country, this discount wouldn’t apply in that situation.

There are even discounts if you belong to professional organizations, so make sure to check on this when you apply.

Auto Insurance and Premium Costs for High School and College Students

High school and college students are in the highest premium group due to their age. The demographic group of 18- to 24-year-olds has the most accidents, statistically and this causes insurance companies to have to raise rates for this age group.

Keeping your driving record flawless during this early time in your life is one positive thing that you can do to improve your premium rates over time. But your premiums will likely be higher than any other age group as long as you are in that age range.

Age is something you cannot do anything about so your best bet is just to ride it out and do your best to keep all of the other factors in the best shape possible.

Should I stay on my parents’ insurance?

One question that many high school and college students ask is whether they should stay on their parents’ insurance plan until they get out on their own. This is a good question and one worth considering.

Technically, you are allowed to stay on your parents’ insurance as long as you live at home. Unlike health insurance, most car insurance companies allow you to do this indefinitely as long as you live at home.

Eventually, you will want to get out on your own and get your own insurance. But while you are in the high-risk age range might be a good time to stay on your parents’ insurance.

The caveat to this is that it will raise your parents’ insurance, so you will have to see if they agree to this plan. You may want to volunteer to pay a small portion of the bill until you have your own insurance.

Remember also that whatever you do affects your parents’ insurance rates, so drive safely and avoid collisions.

Be sure to apply for the good student discount under your parents’ insurance if you are a student with a “B” average or better.

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Buying Your Own Car and Insurance

Once you buy your own car, you will need to get your own insurance because your car will be under your name and not your parents’ name. When you start thinking about the type of insurance and car you want to purchase, that’s when you need to shop around.

The bottom line when searching for insurance is to find the company that best meets your needs. By comparing different companies and policies, you will have a better idea of which one works best for you.

Ask about discounts and see if you can get savings based on good grades (if you are a student) and other factors. Enter your zip code below to begin comparing car insurance options.