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How Your Diploma Affects Your Auto Insurance

Close up to a diploma to illustrate how your diploma affects your auto-insurance.

Are you too cool for school? According to the auto insurance quotes from most auto insurance companies, you shouldn’t be! Although the practice is not across the board, it’s estimated that 60% of auto insurance companies do vary their rates depending on an individual’s level of education.

Auto insurance companies generate their premiums based on driving statistics that relate behaviors, patterns, or information from a driver’s profile, sometimes including educational level, to decide whether he or she is a high- or low-risk driver. For example, if the driver has a history of traffic incidents, driving violations or DUIs, it will count against them and put them in the high risk category, meaning they will get much higher auto insurance quotes than other drivers when looking for insurance coverage.

However, if they have a good driving history, plus they are making choices that indicate more responsibility in other areas of their life, auto insurance companies relate that to safer driving and thus lower their pricing, since they calculate they won’t be paying out a lot of money to cover the costs of driving accidents and injuries. Essentially, they are “rewarding” drivers demonstrating responsible behavior and achievements with lower premiums, and one of these factors can be education level.

Though it’s a hot topic as a discriminatory practice, the majority of auto insurance companies take into account a driver’s education level because there is some research indicating that those with higher education will less likely engage in risky behaviors and have less accidents. Plus, those with higher degrees often have higher incomes, which allow them to pay higher deductibles at the time of an incident, which also lowers their premiums as well.

Among auto insurance companies that use educational level or degrees as a factor in determining pricing, high school dropouts were found to pay the most expensive auto insurance. They may pay hundreds or thousands more than someone with a college degree for the same type of coverage. Surprisingly, however, the biggest pricing gap when looking at auto insurance quotes was between those who had graduated high school and those who had attended college, though they hadn’t received a degree.

If you are against this practice, the best way to avoid paying higher rates based on educational degree or achievement is to check with local or online auto insurance companies and see if you must provide education level in order to receive an auto insurance quote. If they do require it as mandatory, then most likely they will be using it as a criteria to determine your pricing, so move on and try to find one of the 40% that do not. If you have a higher education degree, you may want to ask around and see if there are auto insurance companies that will offer discounts on pricing.

Just remember, that it’s not all about educational levels; there are multiple factors that are measured and weighed to generate the pricing for your auto insurance policy, so play to your strengths and try to find ways that may counteract for any of those areas that aren’t!

Let Freeway Insurance determine if your education qualifies you for insurance discounts. Request a free auto insurance quote online or over the phone at 800-777-5620.

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