Teen drivers are dangerous.

According to the Insurance Institute for Highway Safety (IIHS) the crash rate for teens is three times higher than drivers over the age of 20 and the Centers for Disease Control and Prevention (CDC) says traffic accidents are the leading cause of teen deaths.

All of these grim statistics are the reason your insurance rate will increase significantly -- in many cases premiums double -- the moment you add a teen driver.

Study hard and be rewarded with a student car insurance discount

There are plenty of ways to drive down the cost of insuring your teen and one of them will not only reward your pocketbook, but it will brighten your teen's future. A good student discount, one of the few car insurance discounts aimed at young drivers, puts the discount squarely in control of your teen -- if he studies hard your rates will drop.

Your teen must have a valid driver's license to qualify; learner's permits don't count. According to Glenn Greenberg with Liberty Mutual, "A teen with a permit is automatically covered under their parent's insurance. On the day the teen receives their license and is driving on his or her own, the driver would need to be added to the parent's policy and would become eligible for the discount."

Unfortunately, older students are out, so if you are headed back to school for your M.B.A., don't expect your insurance rates to drop. Age limits vary but in most cases the good student discount only applies to students under 25.

What's it take to be considered a good student in the eyes of an insurance company? According to Loretta Worters with the Insurance Information Institute, in almost all cases it takes a "B" (3.0) average to qualify for a good student discount. Your insurer is not going to take your word for it when it comes to Junior's grades. "You will need to provide documentation from the school," says Worters.

Documentation requirements vary by insurer. Some, such as Farmers, require new documentation every semester while others extend it for a number of years. Nationwide requires documentation at the inception of the discount and again when the driver turns 19.

In some cases, other qualifiers apply. Safeco, for example requires that two adults be listed on the policy before a teen can be eligible for the discount, according to Matthew Gehrman with CityScape Insurance in Arizona.

Fortunately, there is a good chance that your student will qualify for the discount. GPA's have been on a steady upward swing since 1990. According to the "America's High School Graduates" report by the National Assessment of Educational Progress, the average high school student in 2009 graduated with a GPA of 3.0, up from 2.68 in 1990 which means that even if your teen driver is just "average", a good student discount is within reach.

What if your school is your home? Some insurers extend the discount to home schooled students, provided they can document their learning excellence. Nationwide accepts results from standardized tests. Larry Thursby, vice president of auto product and pricing at Nationwide, lays out the requirements, "The results from a standardized test, such as the PSAT, SAT or ACT, may be used. The homeschooled student needs to be in the top 20 percent of that test's national performance."

While the discount for your studious driver will never be huge, any savings will help when it comes to insuring a teen. Good student discounts vary by insurer but according to Penny Gusner, consumer analyst for Insure.com, expect a rate deduction of 5 to 15 percent. "Data gathered for us by Quadrant Information Services showed an average good student discount to be about 12 percent nationwide," says Gusner.

Nationwide pushes the discount range all the way to 20 percent with the largest discounts going to the youngest drivers says Thursby. Farmers goes even further. Alissa Vreman, director of personal lines, confirms the good student discount can extend all the way to 25 percent.

Student discounts by carrier

Following are the details regarding the good student discount for the major insurance carriers:


Age limits - 16 to 25

Grade point - 3.0

Discount - 5 to 20 percent

Documentation - School report, also allows test results to be used. Home-schooled students are welcome.

Liberty Mutual

Age limits - 16 to 25

Grade point - 3.0

Discount - 5 to 20 percent

Documentation - Verbal verification is accepted

State Farm

Age limits - 16 to 25

Grade point - 3.0

Discount - 5 to 25 percent


Age limits - 16 to 25

Grade point - 3.0

Discount - Varies


Age limits - Vary by state

Grade point - 3.0

Discount - Up to 25 percent

Documentation - School report, must be updated every semester.


Age limits - 16 to 25 and unmarried

Grade point - Top 20 percent in the class or B- average for all subjects

Discount - 5 to 20 percent


Age limits - 16 to 25

Grade point - 3.0

Discount - Up to 15 percent


Age limits - 16 to 25

Grade point - 3.0 or honor roll

Discount - Up to 10 percent


Age limits - 16 to 23

Grade point - B average

Discount - Varies by state

How to save even more on car insurance for young drivers

Discounts are not the only way to lower your premium. Maintaining a clean driving record is key to a low rate. "The surcharge for an accident or traffic ticket on top of the high rates already in place for young drivers may be too much for some parents to afford," advises Gusner.

Shop your coverage when adding a teen, your current insurer may no longer be your best option. Gusner recommends shopping your policy once a year.

It's also important to assign your teen to the "right" car, says Worters. If possible, assign your teen to the least valuable vehicle. Unfortunately, with this kind of arrangement there can be no exceptions; your teen must use only the car to which they are assigned, even in an emergency. If your teen is involved in an accident with an unassigned car, penalties could be imposed and your premiums might increase.

Keeping your record clean can result in a discount for your teen. Nationwide offers a "Family Plan" that extends discounts earned by the adults in a household to their teen driver.

Vreman with Farmers reminds parents that teens often emulate the driving habits of their parents. "Parents should be extra vigilant about their driving habits. Obey all traffic laws, don't text and drive, use hands-free devices, and always being courteous to other drivers," she says.