Does a degree mean car insurance savings for you?
When insurance providers calculate your rates, they take many personal factors into account. Surprisingly, one of the things they will look at is the level of education you have achieved. But why does this affect your car insurance costs? Here’s what you need to know.
- The Impact of Education Level on Auto Insurance
Some auto insurance providers will look at your level of education when determining your rates because studies have shown that drivers with advanced degrees are less likely to make a claim than less educated drivers. This means that, assuming all other things are equal, a driver with only a high school diploma may pay more for car insurance than a driver with a master’s degree.
- Higher Degrees Equal More Savings
Many drivers who have a higher level of education wonder how much they can save on their insurance. Studies have shown that the discounts are actually quite significant. For instance, research shows that drivers can save anywhere from $300-$600 annually, just from having some type of post-secondary education. However, experts note that the savings start to decline at higher education levels. For instance, someone with a Ph. D. may only pay $30 less for car insurance than someone with a master’s degree.
It’s also important to remember that many car insurance companies offer discounts to students and alumni. For instance, many insurance companies offer college and high school students access to good student discounts. If the student maintains a minimum GPA, then the company will offer them lower car insurance premiums. Additionally, many alumni groups offer car insurance discounts to graduates, as well.
- How Common is This Practice?
Many states have tried to prevent insurance companies from basing rates on education levels due to its discriminatory nature. For instance, the states of New Jersey and Rhode Island have both attempted to sue insurance companies in an attempt to stop them from using education as a factor in premium calculations. Unfortunately, these efforts and the efforts of other states throughout the country have been largely unsuccessful. Today, many car insurance companies continue to use education level to determine auto insurance rates
Here’s how your education level can affect the cost of your car insurance. Do you have further questions about your auto insurance costs? If so, then contact the experts at Pierce Insurance Group. Our dedicated team is eager to assist you with all your car coverage needs today.