How Does a GED Affect Car Insurance Rates?
Car insurance rates can be higher or lower based on education level, including GED status, affecting premiums and discounts available.
How does education level affect car insurance rates?
Unless you live in one of a handful of states, education level contributes to your car insurance rates — but it's not a major factor. The difference in average auto insurance premium between a GED-earner and a PhD is just $27 per year. This gap has grown by $4 since 2016, but education level remains a minor rating factor. Let's explore the reason behind this price discrepancy and dive into some easy ways to save on car insurance with a GED.
Why does education level matter to car insurance companies?
Some car insurance companies use education level as one of many factors when estimating risk and setting rates. Their pricing models are based on historical data, and in some cases, that data has shown a correlation between higher levels of education and fewer claims. Insurers also sometimes link education with financial consistency, which can influence how they evaluate risk.
However, education has no direct connection to driving skill, and many consumer advocates argue that this factor can be unfair or discriminatory. Because of that, several states have passed laws that limit or ban the use of education in insurance pricing. In states where it’s still allowed, it may be used as a secondary factor alongside things like driving history, age, and vehicle type.
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| Education Level | Avg. Annual Premium |
|---|---|
| None | $1,791 |
| High school diploma/GED | $1,782 |
| Bachelors | $1,760 |
| Masters | $1,757 |
| PHD | $1,757 |
Source: The Zebra
The Zebra’s Dynamic Insurance Rating Tool data methodology
The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.
The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.
For a comprehensive understanding, see our detailed methodology.
Cheapest insurance companies with a GED
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| Company | Avg. Annual Premium |
|---|---|
| USAA | $1,365 |
| Nationwide | $1,476 |
| State Farm | $1,569 |
| GEICO | $1,659 |
| Farmers | $1,786 |
| Progressive | $1,943 |
| Allstate | $2,418 |
Source: The Zebra
It's important to remember that car insurance is very specific, and your quote will depend on myriad factors. Use the above data as a starting point in your search for car insurance. The most popular insurance companies might not be the best option for you, so keep regional insurers in mind. Enter your zip code below to see rates from major insurance companies and local options alike.
What education level gets the cheapest rates?
Drivers with greater educational attainment — Masters and PhD level — pay the least for car insurance. Insurance companies see drivers with less education as more likely to take risks than a better-educated driver. The difference in insurance costs between a driver without a GED or high school diploma and a driver with a PhD is $44 per year.
Keep in mind that education level does not offset poor driving habits. A driver might have a PhD, but if they've got multiple claims or a poor driving record, they won't be getting cheap insurance despite their education. Ultimately, driving safely and avoiding claims is much more important for affordable insurance.
Comparing your car insurance options is quick, simple and hassle-free.
Other ways to save and additional resources
While your education isn’t a major rating factor for your car insurance, saving money is always useful. Let’s break down some top ways to save on car insurance.
While these discounts won’t cut your premium in half, they’re simple and offered by most popular companies.
- Good driver
- Multi-policy discount (auto and renters/home)
- Telematics
- Payment by bank account
- Paid in full discount
- eSignature discounts
- Paperless billing discount
- Multi-vehicle discount
If you have an older vehicle, make sure you’re not paying for coverage you do not need. In general, if your vehicle is worth less than $4,000, and you own it, you do not need comprehensive or collision coverage. These coverages are designed to protect your vehicle, but if your vehicle isn’t worth much to begin with, you might be paying for coverage you do not need. You can determine the value of your vehicle through Kelley Blue Book and NADA online.
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| Coverage Level | Avg. Annual Premium |
|---|---|
| Liability only | $703 |
| $500 deductible | $1,699 |
| $1,000 deductible | $1,493 |
Source: The Zebra
Most insurance experts advise you to only use your car insurance coverage sparingly and with caution. This is because of the way your premium will be impacted after you file an at-fault collision-type claim. Aka, your premium will increase. The majority of car insurance companies will keep an at-fault rate increase on your premium for 3 years. Meaning, you’ll be rated and charged for these claims for up to 3 years after the accident.
| Increase at 6 months | Increase at 12 months | Increase at 3 Years |
|---|---|---|
| +$291 | +$582 | +$1,746 |
As you can see, you’d be paying an additional +$1,700 for an at-fault accident. If you’re unsure if you should file a claim, considering our recommendations below:
- Get an estimate for repairs yourself.
- Use our State of Insurance analysis to see how much an at-fault accident would raise your rates. Again, consider that value over 3 years.
- Compare the out-of-pocket expense to the rate increase, if it is more expensive to file a claim in the long run, pay for it yourself.
Bear in mind, although you’re not obligated to file a claim, you still might have to report that you’ve been in an accident to your insurer. Check your insurance policy specifics to be sure.
Regardless of your education level, it’s always a good idea to shop around frequently for car insurance. While we were able to determine that Nationwide and USAA were the cheapest for our user profile, that doesn’t mean they will be for you. Shop around with as many companies as possible with your user profile to see how much you could be saving.
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.