The moment your child begins driving a car is a major milestone. Unfortunately, it can be a costly one. Adding an extra driver has some unavoidable costs, such as paying more for gas or potentially having to buy a new car. Adding a young and inexperienced driver is also going to raise your insurance rates. Auto insurance companies hate the risk these drivers create and they force you to pay for it. There are , however, ways to mitigate the cost of adding your child onto your insurance policy. The following three discounts can save parents hundreds of dollars every year on their premiums.
- The Good Student Discount. Not only are good grades pivotal for getting into a good school, they can also save you a lot of money on your auto insurance. Most of the major insurers carry a good student discount, which can save you as much as 25% on your auto policy. To qualify, your child needs to maintain a 3.0 or B average, and be enrolled full time in high school OR college. Some insurers also allow those who are homeschooled to get the discount. Placing in the top 20th percentile of a standardized test, such as the SAT, is another way to qualify. Generally, any student up to 25 years old can get it. GEICO is a major exception, limiting the discount to those 22 or younger.
Tough we say "as much as 25%", the actual discount will depend on where you live and your situation. For example, in Maryland we were able to find good student discounts of 11%. In North Carolina, however, one discount we found took off just 1% off the annual premium. As always, it's best to shop around to find the best deal you can.
Driving School Discount. Having your child take driver's education or any other accident prevention/defensive-driving course can save you up to 10% on your monthly bill. Because countless studies have shown young drivers get into a higher frequency of accidents, they are very expensive to insure. Auto insurance companies breathe a little easier when they see a teen driver has taken courses to make them a safer and smarter driver. Their relief translates into savings for you.
If you want to save money on the cost of driving school, check to see if your child's high school or college offers any discounted programs. Some schools also offer driver's ed as an extracurricular class. If that's not available, you can also turn to the insurance companies themselves. A few offer online courses that may be cheaper than traditional options.
Student Away Discount. Did your child go away for college? Then you may qualify for the "student away" discount. The distance is enough to deal with already, no need to be over paying on your auto insurance as well. The insurance companies realize if your child is far away, they won't be using your car as much as they would be if they stayed home. As a result, they are willing to give parents a discount on their policy. Most major insurers carry it and usually require your child be at least 100 miles from home. We found a New York quote from State Farm got $116 knocked off the yearly premium by declaring a student was living away from home.
What happens when they come home for vacations and breaks? No worries there. Your child is allowed to drive the insured car when they come home for any reason.