Why Are Student Driver Car Insurance Rates So Expensive

Reader's Question:

I am trying to get my daughter car insurance under her name but it is much expensive than what I pay. Why are student car insurance rates so expensive?

Linda

Chicago, IL

You would think that since you are younger, your insurance premiums will be much cheaper. Quite the opposite. Student car insurance rates are much more expensive than other policies because of the hazards that combined youth and inexperience brings.

While insurance companies are in business to protect policy holders in the event of accidents, they actually detest it when people make claims, especially those carrying five-figure price tags. Unfortunately, it seems that student drivers accounts for a large percentage of drivers who rack up one violation after another or worse, figure into some of the most serious car crashes that create damage to life and property. As such, some insurance companies opt to defer from offering such a policy, because of its volatile nature.

It is because of the imminent danger and the limited options that student car insurance rates are so high. Think of it as a way for insurance companies to prepare themselves for people queuing up to get payments for a dented fender, whiplash or even the loss of a loved one.

However, there are also insurance brokers who use this lack of options to generate cash for themselves. Before buying a student car insurance policy, make sure that it is either the cheapest or the one that offers maximum coverage. It is ultimately better to invest on higher student car insurance rates that takes care of you than scrimp on something that does not provide you with that much-needed sense of security.

Student Driver Auto Insurance Discounts

Reader's Question:

Hi! I am a student from Kansas. I heard about student auto insurance discounts on premiums. What makes a student eligible for this discount? Please tell me more about this.

Venice

Topeka, KS

Yes, most companies do give incentives or student auto insurance discounts for students who have good scholastic records. Most refer to it as "good student discounts or better grades, better premiums policy." It is the auto insurance companies' notion, and statistics proved it for them, that there is a relationship between academic excellence and good driving. Statistics show that high achievers or scholars would most likely prove to be better drivers in the future. This is the basis for giving discounts on students who have good grades. It is because they are at low risk for accidents and are more likely to follow traffic rules.

A student may be eligible to enjoy this student auto insurance discount if he or she is able to maintain a high GPA of (3.0) or at least an average of B. Most auto insurance companies these days will give a reasonable offer of around 10 percent to 25 percent of discount to qualified individuals. The discounted price will be due to your academic performance, as the policy of "better grades, better premiums" implies. If you managed to pull an A average, then you are eligible for higher discounts, some going as high as 25 percent. The amount of discounts you can avail of range from around 10% to 25% depending on your academic standing. For example, auto insurance companies may give a considerable 15% off on premiums under the following condition: any unmarried and full-time students with ages ranging from 16 to 24 years who have good scholastic records, a dean's lister or a student in the honor roll. However, students should maintain their grades in order to continue enjoying this student auto insurance discount because if their grades go down the required average, then so will their discounted premiums on their student auto insurance.

Car Insurance For Students And Beginner Drivers

Reader’s Question:

I’m getting behind the wheel for the first time tomorrow, and my snot-nosed little brother is pestering me that I’m going to have to pay a fortune because I’m going to wreck the car I’m going to drive. Now that got me a little scared. How does car insurance for students who are learning to drive go about?

Paulla

Seattle, WA

Don’t worry. Car insurance for students in a driving school is usually handled by the driving school you signed up with. It’s just good business sense to insure your own cars when you know that students who have no experience behind the wheel will be driving them. Heck, no one would want to pay for every single fender-bender that their student driver cars will be punished with.

However, it’s also possible for an unscrupulous driving school to charge a fortune for their student drivers when they damage the cars. It’s unethical, yes, but it’s not going against the law.

So it’s best to be careful: play it safe and check the bill you paid for the driving school’s lesson. If you paid a slightly cheaper tuition fee, you may have skimped out on the extra benefits. Car insurance may be one of those benefits. If you don’t see any car insurance for students anywhere on the bill, it would be to your best interest that you either pay for extra insurance or switch schools if they don’t want to or simply can’t provide you with one.

It’s better to be safe than sorry when you’re driving for the first time in your life.