Teen drivers pay the highest auto insurance rates. There’s a reason for that. Statistically speaking, teens are the worst drivers on the road and get into more accidents than other age groups.

Motor vehicle crashes are the leading cause of death among teens, according to the Centers for Disease Control. The National Highway Traffic Safety Administration (NHTSA) reports that 1,908 drivers between the age of 15 and 20 died in a motor vehicle crash in 2016.

While young drivers only account for 5.4 percent of drivers in the United States, the NHTSA reports that drivers between the ages of 15 and 20 accounted for 9 percent of all drivers involved in fatal crashes in 2016. Plus, 12 percent of all drivers involved in police-reported accidents. Of the drivers between the ages of 15 to 20 who were killed in those 2016 crashes, 24 percent had been drinking alcohol.

Those are sobering statistics, but there’s reason for optimism.

"There has been some progress," explains Kara Macek, senior director of communications and programs, Governors Highway Safety Association.

Macek points to Graduated Driver Licensing (GDL) laws as one reason. GDL laws restrict young drivers. For instance, they may not drive with other teens in the car. Or a state may limit the hours in which they can drive until they gain experience. Macek credits those laws with a large drop in the number of teen fatalities in motor vehicle crashes over the last decade.

Macek said 4,981 teens were killed in fatal crashes in 2007. Ten years later, that number declined to 2,734.

“Despite this, teen drivers are still very much over-represented in traffic crashes and have crash rates three times those of drivers 20 and older per mile driven,” Macek says.

There’s another downside for teen drivers -- higher auto insurance rates. There is hope though. Auto insurance discounts are one way for teen drivers to find lower rates.


Good student discounts

Almost all car insurance companies offer a good student discount, both for high school students and college students. 

How much could you save? The student driving population’s average base premiums for car coverage is $6,110 annually. Add in a good student discount, and that average policy rate dips to $5,750. That’s a savings of $361, or about 7 percent. You can save even more depending on your insurer and state.

Here are the states with the highest average good student discounts:

  • Illinois -- 13 percent
  • Kansas -- 11 percent
  • Louisiana -- 11 percent
  • South Carolina -- 11 percent
  • Virginia -- 10 percent
  • Mississippi -- 10 percent

That's a significantly-larger discount than most other discount categories.

So, what constitutes a "good" student? Most major car insurance companies require a "B" (3.0) or better average to qualify for the good student discount. The discount usually applies to students under 25. Your insurer is going to require proof that your child achieved those grades, too, by providing proper documentation.

Homeschooled teen drivers may also be eligible, and must achieve a certain score on standardized tests. The discount normally applies to bodily injury liability, property damage liability, PIP, medical payments, collision, and comprehensive coverages.


College student discounts

Likewise, for good students who are away at college, most insurance carriers offer discounts. There is no "one-size-fits-all" option, though, as Allstate explains. A wide array of variables affect the discount rate, and these include whether or not the student is taking a car to school and driving it regularly, whose name is on the title, and whether or not the student's permanent address is still the parents’ home.

Most car insurance companies offer discounts for college students, but those vary. The savings generally range from 5 to 15 percent.

College students who meet minimum grade requirements can get up to 25 percent off their rate. Some insurance companies, such as State Farm, maintain this discount until the person turns 25 -- even after graduation.

"You could be eligible for this discount If one of the operators of your vehicle is a student under the age of 25 who moves away to school and only uses the car while at home during school vacations and holidays," says Vicki Harper, State Farm public affairs specialist focusing on auto safety.

State Farm boasts several ways for college students to get discounts, including its Steer Clear Safe Driver Program, which can garner 15 percent off the premium. Harper says new drivers or those under 25 years of age without any at-fault accidents or moving violations within the past three years may qualify for State Farm's Steer Clear auto insurance discount.

“You could save as much as 15 percent while learning to become a better, safer driver. Steer Clear offers driving-focused training that encourages young drivers to think more about safety and practice safe driving habits. Parents of youthful drivers can also monitor and guide their progress,” says Harper.

Farmers also offers a solid discount, and an even deeper one if the student falls into the Distant Student Discount category in which the student lives certain mileage from home. From Allstate, a student attending college at least 100 miles away from home can earn a 35 percent discount for the parents. Nationwide, American Family, USAA, and Liberty Mutual all offer levels of discounts for college students, too.

We found the average student away at school discount is 14 percent. That’s a $404 discount on the average base for that driver population.

Here are the states with the highest average student away at school discounts:

  • Arizona -- 25 percent
  • Wyoming -- 21 percent
  • Georgia -- 21 percent
  • Oregon -- 21 percent

It is particularly important for consumers to shop around and ask many questions in the "college student savings" department.


How to ask about student discounts

There is no magic password or secret knock to getting a discount. The idea is to ask as many questions as you can and make sure you have covered every avenue.

"Start with your current company that you're insured with," explains Janet Ruiz, director of strategic communications at the Insurance Information Institute.

Life brings changes, and policies also update and evolve, so it's important that you review the available auto insurance discounts annually.

Find out more about adding a teen to your policy. 


Other potential discounts

There are a other ways to cut your car insurance payments.

  • Bundle and save. Having multiple policies with an insurer can bring big savings. The companies usually offer between 10 to 25 percent discount if you "bundle" policies. That means having an auto policy, as well as a homeowners’ policy or condo policy. Similarly, you can get up to a 20 percent discount by taking advantage of a multi-car discount, in which you insure two or more vehicles with the same company. This discount is typically on your liability, collision, and comprehensive coverages.
  • Loyalty to your insurance company can matter when it comes to discounts. These discounts vary by state and insurer. Farmers, Geico, Nationwide, Allstate, and USAA are among those who offer this discount, which is generally up to 10 percent. State Farm boasts a loyalty rewards program in which you can earn points on credit cards by sticking with the company.
  • Good driver and safe driver discounts can get you between 5 and 25 percent in savings, depending on the carrier, and usually requires that you have a clean driving record for at least three years. That means no DUIs, no moving violations, and no at-fault collisions.
  • Policyholders who drive less than a specified number of miles each year, usually 7,500 to 10,000 miles, can get a reduction in their base rates, applied to bodily injury liabilities, PIP, property damage liability, and collision premiums, depending on the policy. This "infrequent driver discount" is not as generous as others, but it all helps. Some car insurance companies require an odometer check if this is applied.
  • Have a blaring alarm or security/anti-theft device, such as a Lojack, installed in your vehicle? That could qualify you for a safety-feature discount of up to 30 percent in some cases.
  • If you can pay your annual bill in full, that can save you up to 10 percent on your payment, rather than the more common approach of paying in installments. Going paperless, too, can add a small discount.

Harper says State Farm's usage-based insurance program, called Drive Safe & Save, uses information from your smartphone or your vehicle's OnStar communication service to calculate your discount.

"In some states, you could qualify for a discount if all the operators of your vehicle under the age of 21 complete an approved driver education course," says Harper.


How else can you save on car insurance for young drivers?

We've established that adding a young driver to your insurance policy is going to be pricey. But other maneuvers can perhaps lighten the blow. According to the Insurance Information Institute, it's generally less expensive to add a teen to a policy rather than he or she purchasing a car. Also, if possible, it's usually most cost-effective to assign the young driver to the least valuable car.

Having a young driver on your policy means you should think about increasing your liability insurance for greater protection. If you do that, raising your deductible can be a way to save on your premium while increasing liability coverage.

Adding a young driver to your insurance can double or triple your rates, but make sure to take advantage of discounts so you can soften the blow. Student discounts are a great way to let your children's academic achievements reduce your rates.