Driver Training: Auto Insurance Discounts Timeline

Auto insurance companies offer driver training discounts to new drivers who have completed a driver training course. This course teaches the fundamentals of how a car works, the rules of the road, and strategies to stay safe while driving. The intention is that graduates will help reduce the number of accidents new drivers often get into. The discount varies between insurance providers but could amount to around 5% to 20% off insurance premiums for three to five years. To qualify for the discount, drivers need to log several hours of experience behind the wheel of a vehicle.

Defensive driving courses can save you between 5% and 20% on insurance premiums

For example, drivers aged 55 and older can often receive higher discounts, typically between 10% and 20%. Additionally, some insurance companies offer higher discounts to younger drivers, usually those under 25 years old. Insurance companies consider these age groups to be more at-risk, and therefore offer higher incentives to encourage safer driving.

Your driving record can also impact the discount you receive. Many insurance companies will only offer defensive driving discounts to customers with good driving records. If you have recent at-fault accidents or moving violations on your record, you may not qualify for the same level of discount as a driver with a clean record.

The length of time that the discount is applied to your insurance premium can vary, but it typically lasts for three to five years. After this period, you can often take the defensive driving course again to refresh your skills and qualify for the discount once more.

It's important to note that eligibility and discount amounts can vary by state and insurance company. Some states, such as New York, require insurers to offer rate discounts to drivers of all ages for taking safe-driving courses. Therefore, it's always a good idea to check with your insurance provider to see what specific discounts are available to you.

In addition to the financial savings, defensive driving courses provide valuable skills that can help keep you and others safe on the road. These courses cover various topics, including safety information, driving techniques, and local driving laws, all of which can help you become a better, more cautious driver.

Young and new drivers are seen as high risk and face higher insurance rates

Lack of Experience:

Young drivers, especially those under 25, are considered high-risk by insurance companies due to their limited driving history. They are seen as more prone to accidents and mistakes, such as failing to check blind spots or driving too fast, which can lead to insurance claims. As a result, insurers charge higher premiums to account for the added risk.

Higher Chances of Accidents:

Statistically, young drivers are more likely to be involved in accidents than any other age group. According to the Centers for Disease Control and Prevention (CDC), the risk of motor vehicle crashes is highest among teens aged 16 to 19. This increases the potential cost of claims for insurance companies, leading to higher premiums for young drivers.

Distractions:

Young drivers are more likely to engage in distractions while driving, such as texting or talking on the phone. Distracted driving increases the risk of accidents and contributes to higher insurance rates for this age group.

Lower Credit Scores:

Young drivers, especially those under 25, may have lower credit scores or limited credit history. Insurance companies consider credit scores as a factor in determining insurance rates, as lower credit scores can indicate higher levels of risk.

Ways to Reduce Insurance Costs:

While young and new drivers may face higher insurance rates initially, there are ways to mitigate these costs over time:

• Improving driving skills: Young drivers can take defensive driving courses to improve their skills and safety awareness, which may lead to insurance discounts.
• Good student discounts: Maintaining good grades can lead to insurance discounts, as there is a correlation between academic performance and responsible driving behavior.
• Telematics programs: Usage-based insurance programs that track driving behavior can result in lower rates for young drivers who demonstrate safe driving habits.
• Staying on a parent's policy: Young drivers can benefit from lower rates by remaining on their parent's insurance policy, taking advantage of the parent's longer driving history and potentially higher credit score.

Discounts are available for students with good grades

Many insurance companies offer discounted rates for students who can demonstrate good academic performance. These good student discounts are based on the assumption that young drivers who are responsible in their studies are more likely to be responsible on the road. As a result, they are less likely to file claims on their car insurance and therefore deserve to pay lower insurance premiums.

The specific requirements for a good student discount vary depending on the insurance company. However, typical requirements include:

• Being under the age of 25.
• Being enrolled as a full-time high school or college student.
• Maintaining at least a "B" average or equivalent level of performance on standardised tests.

Some insurance companies may also require proof of academic performance, such as a school transcript or report card. It's important to note that the discount may only be available to unmarried students or those who are enrolled in a specific type of program.

• State Farm offers a discount of up to 25% on premiums to full-time students up to the age of 25 who earn good grades.
• GEICO offers a discount of up to 15% on certain coverages for full-time students who maintain a "B" average or better.
• Allstate offers discounted car insurance rates for eligible unmarried students under the age of 25.
• American Family Insurance offers a "good student" discount for students between the ages of 16 and 25 who are enrolled in high school or college and maintain a minimum of a "B" average.
• Farmers Insurance offers a similar discount for full-time students with good grades or test scores.
• Nationwide Insurance offers a discount to students between the ages of 16 and 24 on their car insurance if they maintain a "B" average or higher.
• Progressive offers insurance discounts for full-time students under the age of 23 with good grades.

It's always a good idea to check with your insurance company to see what specific discounts and requirements are available to you as a student.

Discounts are available for drivers with safe driving records

The criteria for qualifying as a safe driver vary depending on the insurance company and state. Generally, insurance companies look for drivers with no at-fault accidents, no major comprehensive claims, and no points on their driver's license from moving violations (such as speeding, reckless driving, or DUI/DWI). Some companies may also consider the entire driving history of the driver, including car accidents and traffic violations.

The amount of the discount also varies, typically ranging from 5% to 30% off your insurance premium. For example, Progressive offers a discount of up to 31% for accident-free drivers, while violation-free discounts can be up to 15% off the premium. The discount may be offered as a percentage off the premium or a flat amount, and it usually lasts for a specified period, such as three to five years. After this period, drivers can often take the course again to refresh their skills and qualify for the discount again.

In addition to safe driver discounts, insurance companies may offer other discounts for safe driving habits. For example, some companies offer telematics-based programs that track driving habits and identify safe drivers. These programs may provide tips to improve driving and offer discounts based on the data collected. Other companies may offer discounts for completing a defensive driving course, which teaches accident avoidance techniques and road safety statistics.

It is important to note that eligibility and discount amounts can vary by state and insurance company, so it is always a good idea to check with your insurance provider to see what specific discounts are available and how to qualify for them.

Discounts are available for drivers with low mileage

State Farm will periodically send a request to update your vehicle’s mileage to keep the discount on your insurance policy. You’ll lose the discount if your odometer reading shows you’ve driven more than 7,500 in a year.

Remote workers, people with short commutes to work or school, and retirees might be good candidates for low-mileage insurance.

• Find out your insurer’s eligibility requirements: A certain annual mileage is typically the only requirement, but each insurer’s maximum mileage might vary.
• Ask to apply the discount to your policy: Your insurer will need your current odometer reading to do so.
• Monitor your mileage: Keep an eye on your mileage throughout the year to make sure you stay under the mileage limit.
• Provide an updated reading when your company asks for it: If you don’t, you’ll lose the discount.

Not every insurance company offers a low-mileage discount, but some of the best auto insurers offering a low-mileage discount are American Family, USAA, State Farm, National General, and Safeco.

If your insurer doesn’t offer a low-mileage discount, ask your insurance company if it offers pay-per-mile car insurance or a telematics program that tracks your driving habits and provides savings for safe driving behaviour.

Frequently asked questions