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Have no accidents or violations in the last 3 years.

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Getting good grades doesn't just get you on the honor roll and dean's list. It can also lead to lower auto insurance rates.

That's especially important when it comes to teen drivers. Adding a teen driver to your policy increases your rates by 130 percent on average increase. That's more than $2,000 more. So, you can see it's vital to find other ways to reduce your rates. A good student discount is one way. 

Many car insurance companies offer good student discounts. The definition of a good student varies from one insurance company to another -- as does the amount of the discount.  In general, car insurance companies recognize a "good student" as someone under age 25 that is enrolled in high school or college and ranks in the upper 20 percent of his or her class, has a B average or 3.0 average or is on the dean's list or honor roll.

Here are a few examples:

Nationwide and Geico offer the discount for drivers between 16 and 24, who are full-time high school or college students. The students must achieve a minimum B average for the discount. They both provide discounts of up to 15 percent. State Farm has similar requirements except the insurer extends it to age 25. Plus, State Farm provides discounts of up to 25 percent. 

A discount for a good student is based on the premise that good students are better drivers. Statistics have shown that students with higher grade point averages (GPA) tend to be more responsible when operating an automobile and are in less accidents. This means this group of drivers pose less risk and thus are given a reduction in their premiums.

This discount normally applies to bodily injury and property damage liability insurance, medical payments, and physical damages of comprehensive and collision coverages providing that each such youthful driver meets certain requirements.  Insurance companies underwriting guidelines vary on how much the good student discount will be for those that meet their requirements. 

The average good student discount is 7 percent. The average insurance rate that includes those drivers is $6,110. A 7 percent discount would save you $361. That would decrease your auto insurance rate to $5,750. That's still a hefty bill, but is better than if you didn't benefit from that discount. That makes it a great discount for teenagers.