What is a Further Education discount?

Education discounts on car insurance can save you between five and ten percent if you have a 4-year degree or higher. Geico, Liberty Mutual, and others offer a further education discount on car insurance.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: May 26, 2020

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Here's what you need to know...

  • All auto insurance companies offer auto insurance discounts to help and attract certain drivers to buy their products
  • Unlike discounts offered by retailers, your personal details and your history are what will be used to apply discounts
  • Your job and career choice can have a direct impact on your insurance premiums
  • Many companies offer a further education discount to drivers who have already earned at least a four-year degree
  • Statistics on driving habits indicate that drivers who are disciplined enough to earn a degree have better driving records
  • If you’re currently a student and have not yet earned your degree, you may be eligible for a Good Student Discount instead

When you’re in college, you look for every establishment that will offer you a beloved student discount.

Even if the savings is just five to 10 percent off of the total cost of your goods, every penny counts when you’re a starving student who is dedicating their time and a majority of their money to their studies.

In the end, earning a degree pays off as you pursue the career of your dreams.

Going to college and actually completing your degree program can pay off in a number of ways. Obviously, the first benefit of being a degree holder is that you’ll increase your lifetime earning potential and your education level on your resume.

You’ll land a better job and you’ll make a decent living as you gain experience. These aren’t the only benefits to consider. Your educational history might even have an impact on your auto insurance rates.

Compare car insurance quotes today to find the best rate for the coverage you need. Enter your ZIP code into our FREE comparison tool above today.

What is a Further Education Discount?

Like all discounts, the Further Education Discount will bring your auto insurance premiums down when it’s applied to your personal policy.

The purpose of the discount is to lower the premiums of vehicles that drivers are assigned to when the driver is a college graduate. In order to qualify, most companies in most states will require that you have a four-year degree or higher.

An associate’s degree or a diploma from a trade school won’t satisfy the level of education requirement.

Education level has a lot to do with who qualifies for the savings.

While many people don’t think that level of education and driving skill relate to one another, carriers that offer a discount have discovered the correlation and find it important enough to apply a discount.

No matter how irrelevant you might think that the criteria are, it’s important to take advantage of savings whenever you can.

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Why do companies offer discounts to college grads?

If you don’t have a college degree or you don’t see the correlation between education level and insurance premiums, it’s reasonable to wonder why completing college would qualify you for lower premiums.

In the insurance industry, your personal rates are only calculated after a lot of risk indicators are considered. People who are at a higher risk of filing a claim will pay a higher premium.

Believe it or not, a lot of data is collected and educational level has a lot to do with how likely a driver will be to file a claim.

It doesn’t mean that all college graduates are safer drivers, but on average a college graduate will file fewer claims than someone who only completed high school. There are a few reasons for this:

  • College graduates are usually in their mid-20s and have already gained driving experience needed to make good decisions behind-the-wheel
  • Graduates who dedicate four or more years to their education tend to be more disciplined in work and also on the road
  • College graduates are qualified to be in higher-paying positions and because of that they are more likely to pay for their own damage so they don’t file claims

Will you always be eligible a discount for having a degree?

Not all companies offer the Further Education Discount. Some insurers might not offer the discount because the educational level is prohibited from being used to set rates or offer savings in their state where they are operating.

While a majority of states do acknowledge that the data does indicate there is less risk associated when the driver has completed more school, there are a few states that feel the practice is discriminatory.

There are companies that do consider your college experience for calculating rates but won’t call it a discount. Instead of promoting it as a discount, your level of education is just used as a personal factor much like your occupation or your years of licensing experience.

If you’re asked about how much schooling you’ve completed, the probability that being a graduate is helping your premium is high.

Which insurance carriers offer a Further Education Discount?

Your academic work isn’t always going to earn you a discount.

If you’ve put in enough work to earn yourself a Bachelor’s degree or higher, no matter what you’re majoring in, you should consider doing business with a carrier in your state that is open about the fact that they offer a Further Education Discount.

The following respected insurers offer a discount for being a grad:

  • Ameriprise
  • Country Financial (For single drivers up to 30 or married drivers up to 25 if they averaged a 3.0 or higher.)
  • Esurance
  • Geico
  • Liberty Mutual
  • Nationwide
  • Safeco
  • The Hanover
  • Travelers (Only available in California)

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How much will a four-year degree save you?

How much you’ll save off of your insurance for your college experience depends on the company. With Geico, you can save up to eight percent off of your premiums if you were a member of a sorority or fraternity.

Esurance offers a 12 percent discount to alumni of Pac-12 schools. Generally, the discounts range from five to 15 percent.

Are there any discounts available while you’re in school?

If you’re pursuing a degree and you haven’t quite finished school yet, you can still qualify for discounts.

The discount that you should be looking for is the Good Student Discount. If you’re insured on a parent’s plan and you live more than 100 miles away from home, you might even want to look for a Distant Student Discount as well.

Good Student Discounts are applied to premiums when the driver (25 and under) is attending high school or college full-time and they are earning good grades.

The requirements may vary depending on the school but you will have to be enrolled in at least 12 credits and you will need to possess at least a B average for the semester to get the savings.

If you’d like to compare the difference between a Good Student and a Further Education Discount, you can easily do that by calculating your own quotes online.

When you enter your information into our quoting tool, you can adjust the details and see what the premiums will look like once you earn your four-year degree. By tinkering with the tool, you may even find a better rate without putting in much effort.

Enter your ZIP code into our FREE comparison tool today!

References:

  1. https://www.denverpost.com/2012/07/27/income-education-can-affect-auto-insurance-rates-2/
  2. https://www.nasdaq.com/article/higher-education-equals-lower-car-insurance-cm248522
  3. https://www.actuary.org/pdf/casualty/testimony_feb09.pdf
  4. https://www.huffingtonpost.com/robert-harrow/3-factors-drivers-should-_b_9186540.html
  5. https://www.countryfinancial.com/SiteController?url=/insuranceInvestments/autoInsurance&WT.qs_osrc=fxb-156598110#Auto_Insurance_Discounts
  6. https://www.geico.com/save/discounts/car-insurance-discounts/
  7. https://www.safeco.com/products/auto-insurance/discounts
  8. https://www.foxbusiness.com/features/2013/07/01/auto-insurance-discounts-not-to-be-missed.html
  9. https://www.esurance.com/company/news/2012-esurance-pac-12-discount-helps-students-and-alumni-save-on-car-insurance
  10. https://www.thebalance.com/car-insurance-discounts-for-students-527530
  11. http://fortune.com/2014/07/31/5-secrets-to-save-your-teen-on-car-insurance/

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