It used to be that a driver’s license spelled freedom for young drivers, and even for their parents who could retire as after-hours, part-time taxi drivers. That freedom meant asking for the keys to the family vehicle. But as more young drivers took that freedom to the road, the costs associated with getting behind the wheel began to creep upward. In fact, from 1990 to today, car insurance as a whole has increased more than 220% … and even more for young drivers who represent roughly 13% of all licensed drivers today.
A recent Forbes article on the matter cites several factors for increased insurance rates, including the higher cost of replacement (for damages, write-offs, insurance, etc.) among them. In other words, today’s accidents are a lot more severe and costly today than they have been before, regardless of the vehicles involved. Yes, even someone driving an “old clunker” like those that many students opt to purchase to keep costs low while attending school and working part-time jobs yield high costs when involved in an accident.
What do those costs really mean? According to ValuePenguin, rates for student drivers range from an average of $11,300 at the high end (Michigan would be the most expensive) to an average low of $900 at the lower end (Hawaii). Interestingly, the minimum wage in Michigan where rates are at the highest is just $9.25 per hour, while it’s $10.10 in Hawaii where premiums are the lower end of the spectrum.
Faced with high costs associated with insurance, let alone the cost of living as a student, students should take the time to examine their insurance options. To help offset high costs, many insurers discount their premiums through the following programs:
In some instances, big insurers like State Farm, GEICO, USAA, and many others will slash premiums by as much as 25% for students who maintain a GPA of 3.0 or “B” or better. Likewise, other insurers like Liberty Mutual and Nationwide will discount premiums for students attending school and living in residence more than 100 miles from home.
Understanding premiums and discounts can go a long way toward helping young drivers seize the freedom their parents enjoyed when they first earned the privileges associated with a driver’s license. But knowing where to turn to uncover obscure or less well-known discounts can seem as complicated and daunting as searching out the best scholarship programs available for new college students. That’s why companies like Underground Elephant exist; specifically, to help consumers understand the landscape and research their options using real-time analytics. Moreover, they offer insights as well as tips and tricks to help drivers lower their insurance costs while also providing up-to-date comparisons from some of the nation’s top insurance companies.
And speaking of scholarships, the Underground Elephant Scholarship is now open for entries. In 500 words or less, they want to hear about what safe drivers are doing to make a difference in their communities. The winner will receive a $1,000 scholarship.
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