Car Insurance Discounts for Students

Good student and resident student discounts offer steep savings

Driver adjusting rear view mirror in car with green background behind
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It's not a secret that teenagers pay a higher price for car insurance. They're young and inexperienced at driving, which makes them a higher risk. However, students looking for relief from the high cost of insurance do have some options. Most insurance carriers offer a couple of car insurance discounts designed specifically for students.

Two of these discounts are "good student" and "resident student" discounts. Read on to learn more about these discounts, and how you can qualify for them.

Why Are Students More Expensive to Insure?

Car insurance companies are designed to minimize their financial risks. That means the more risk you bring to the company, the more you can expect to pay. On the other hand, the safer driver you are, the lower your premiums will be—but it’s complicated for students.

While some young people may be excellent drivers, insurers don't actually drive with each customer to assess their driving skills. Instead, they use equations that show the average risk of a particular group. Components in this equation include how long you've held car insurance, and whether you've ever made any claims. Since students are new to driving, they don't have a solid record of driving, and the insurance company's equation calculates this lack of experience as an extra risk.

Thankfully, insurance companies do recognize that their calculations aren't perfect. That's why they make discounts available to individuals who can prove they are less risky than their peers.

Good Student Discounts

Insurance companies assume that someone who's a responsible student will also be a responsible driver, and that's why they offer good student discounts. Like many aspects of insurance, good student discount guidelines vary from company to company, and sometimes from customer to customer.

One definition of a "good student" that's used by several insurance companies is a student who maintains a "B" average (a 3.0 GPA). Students may have to prove their school performance by providing report cards and obtaining signatures from school administrators.

Both high school and college students can receive this discount, so long as they are considered full-time students and fall within the age range specified by the insurance company (typically between the ages of 16 and 24). Complications arise with homeschooled students, but the discounts are still available—there just may be additional paperwork or school scores required.


These discounts depend on consistent, strong performance. If your grades start to slip, you may lose your good student discount.

Potential Savings With a Good Student Discount

The good student discount can be a serious discount, ranking high among the top money savers on car insurance. Savings will vary by the insurance carrier, but they are often substantial. State Farm, for instance, offers up to 25% discounts for good students.

It's best to speak with an insurance agent to see exactly how much you could be saving with a good student discount. Even if your grades aren't good enough to qualify yet, you can touch base with your insurance agent as you work to improve your GPA.

Resident Student Discount

The resident student discount applies to students who move away from home to attend school. However, if the student takes the car with them, they won't qualify. The discount is intended for students who leave their car at home and do not regularly drive while they're at school.

Students often remain on a parent's auto policy while in college because they will drive the car when they return home to visit. They may also occasionally drive a car while they're at school.


Many students still need auto insurance, but they won't drive as often. That's why insurance companies created the resident student discount.

Some companies may provide a specific minimum distance required to qualify for the discount. A student may be required to attend a school that's at least 100 miles away from their home, for example. The verification process depends on the insurance carrier. Some will require a current schedule of classes, some just need the address of the college being attended, and others may not require any verification. Ask your insurance carrier what is required for verification and get the documentation as soon as possible.

Potential Savings With a Resident Student Discount

Like good student discounts, the exact savings for a resident student discount depends on a variety of circumstances. However, you can plan on the resident student discount making a significant dent in your insurance premium. Essentially, the student is a secondary operator with minimal access to a vehicle, which makes them much cheaper to insure.

The Bottom Line

Anytime discounts are offered on car insurance, do what you can to meet the requirements for obtaining them. A resident student discount won't apply for everyone, especially high school students who still live at home. However, the good student discount provides an attainable goal for most students. Students who don't qualify today can work to improve their grades, so they can enjoy the steep discounts offered. Check with your insurance carrier to find out what discounts are offered, how much you can save, and what requirements you'll need to satisfy to enjoy those discounts.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Insurance Information Institute. "What Determines the Price of an Auto Insurance Policy?"

  2. State Farm. "Auto Insurance Discounts."

  3. Allstate. "Car Insurance for College Students."

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