Does Your Degree Affect Your Auto Insurance Premiums?
by Christy Bieber | Published on Sept. 4, 2021
You can expect to pay more for auto insurance if you don't have a college degree.
Many different things impact how much a driver will end up paying for auto insurance. Some of these are obvious, such as the motorist's driving record. But there are also some things that most people wouldn't necessarily assume would affect the price of their auto insurance.
One example is educational level.
Specifically, people with a bachelor's degree generally end up paying less for car insurance than drivers who only have a high school diploma. And the cost discrepancy may surprise you.
How much does a degree impact car insurance costs?
According to The Ascent's data, the national average auto insurance premium for drivers who have a bachelor's degree is $2,168 per year. This is $478 cheaper than the overall national average for all drivers, which is $2,646.
This discrepancy may seem big, but it pales in comparison to the specific difference in cost a driver with a four-year degree will pay versus someone who only has a high school diploma. The national average auto insurance premium for a motorist with a high school diploma is a whopping $5,988. That is $3,820 more than someone with a bachelor's degree would pay -- more than double the cost.
There are a lot of potential explanations for that. One reason is that a lot of teens and young drivers don't yet have bachelor's degrees but still need car insurance -- and younger drivers are much more expensive to insure due to their relative lack of driving experience and increased chance of accidents.
Insurers have also determined that people with only high school diplomas tend to present more overall risk of collisions, and insurance is priced based on the likelihood of a crash occurring.
What can drivers do to keep costs down?
It may not seem fair to those without degrees that they get stuck paying higher auto insurance rates, but unfortunately there's little that an individual driver can do to change the parameters that insurers consider when setting prices.
Every driver, however, can take steps to keep their premiums as low as possible -- regardless of their educational backgrounds. These include things like:
- Shopping around for auto insurance quotes once a year to try to get the best rates
- Buying a vehicle that is cheap to insure -- one that comes equipped with good safety features and anti-theft devices
- Doing everything possible to avoid moving violations and accidents that send insurance costs skyrocketing
It doesn't make sense for a motorist to try to earn a college degree just to lower auto insurance premiums. But for those without advanced education, it is even more important to take these other steps to try and find an insurer that doesn't place as much of a premium on education in assessing risk.
By taking the time to find the right insurance provider, drivers who haven't gone beyond high school can still find affordable auto insurance rates so they can protect their personal finances while on the road.
Our best car insurance companies for 2022
Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we've researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.