How does Education Level Affect Car Insurance Rates?

Education level and car insurance

It’s no secret that insurance companies take a plethora of factors into consideration when determining car insurance rates. But did you know that they look at your education level as well? While we aren’t saying it’s time to head back to school and hit the books just to save a few bucks on your monthly bill, it is worth it to take a look at how your education level affects your car insurance rates.

Why Education Matters to Insurance Companies

You might be asking, why do car insurance companies care about what degree I may or may not have? How does that have anything to do with car insurance?

A study performed in Maryland and New Jersey revealed the answer. Researchers wanted to know if there was a direct correlation between education level and claims risk. The study showed that more educated drivers tend to file fewer claims.

While more educated people may not necessarily be better drivers, research indicates they do tend to take fewer risks. They are less likely to drive under the influence or disobey traffic laws. This group is also more likely to own a home and have multiple vehicles, meaning that they often qualify for additional discounts.

How Much Will You Save With Higher Education?

So just how much will you save by having an advanced degree? The difference is nothing to scoff at.

Studies show that current college attendees and graduates can save anywhere from $300 to $600 a year.

Possible savings depend on the level of higher education that you currently hold. A high school dropout may pay up to $300 more than someone who graduated with a high school diploma. However, a person with a bachelor’s degree will pay $300 less than someone with a twelfth-grade education.

This doesn’t mean that you should start planning to get every degree out there. The more degrees you receive, the fewer savings you stand to get. For instance, a person with a Ph.D. may only pay $30 less than someone holding a master’s degree.

Student and Alumni Discounts

If you’re currently enrolled in school, it might be worth your while to skip that next party and plan a study sesh instead. Why? Your grades and overall GPA can have a direct impact on how expensive your car insurance rates are.

Allstate, Progressive, and State Farm all offer a “good student” discount for younger drivers. As long as they maintain a GPA of 3.0 or above, they qualify for discounted rates. Students making A’s and B’s will pay anywhere from 5 to 15% less than those with lower grade averages.

If you keep your grades up, you can save money all through your academic career until you turn 25.

How Can I Lower My Insurance Rates?

If you can’t afford to head back to school just yet, there are a few other ways to lower your insurance rates:

  • Hunt for Discounts: Even though you won’t qualify for education discounts, it doesn’t mean you won’t receive others. Ask your insurance rep about any discounts they offer and check to see if you are eligible. Trust us, there are a ton out there — many of which you probably didn’t even know existed!
  • Drive Less: If public transport is readily available where you live, consider taking the bus or train a few times a week to cut down on your yearly mileage.
  • Be A Good Driver: It never hurts to improve your driving skills. A defensive driving class could make you eligible for discounts. Insurance companies use your driving record to determine car insurance rates, so keeping it clean is one way to keep costs low.
  • File Less Claims: If possible, try to limit the number of claims filed with your insurance company. The more claims you file, the higher your premium will be.
  • Modify Your Policy: Adjust your policy where possible. You can cut costs by raising your car insurance deductible or bundling your home and car insurance
  • Compare Car Insurance Companies: Don’t put all your eggs in one basket. Shop around before deciding on a single car insurance company.

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If you’re fresh out of high school, it’s the perfect time to consider continuing your education to get a higher degree.

Insurance companies will always use various factors to calculate your premium, but you can use the education level factor to your advantage. You can choose to go with an insurance company that offers discounts for higher education. Or, opt for one that doesn’t care about your education level.

The best thing you can do is to shop around and compare car insurance rates from multiple companies. This way, you can get the most bang for your buck, regardless of your education level.

To find out more about how to get the best rates, visit, or simply enter your ZIP code below!

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