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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?

 
It all comes down to risk.
 

In order to predict how much risk you pose, auto insurance companies rely on demographic and historical rating factors. Major factors — driving history and age — play a major role in dictating rates. Others — such as education level and gender — matter less. The below data shows average premiums by education level.

 
Education Level Avg. Annual Premium
None $1,791
High school diploma/GED $1,782
Bachelors $1,760
Masters $1,757
PHD $1,757
Updated: 10/04/22.

Dynamic auto insurance data methodology

Methodology: The auto insurance rates displayed above and throughout this page are dynamic, meaning the data will refresh when the most recent information is made available. Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage. This profile was adjusted based on common pricing factors used by major car insurance companies, like age, coverage level, driving record and others.

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.

The only exceptions are New YorkCaliforniaHawaiiGeorgiaMontana, or Massachusetts. These states prohibit car insurance companies from incorporating education level as a rating factor.


Cheapest insurance companies with a GED

USAA and Nationwide offer the cheapest insurance for drivers with a GED. The below data show rates from top companies for a GED-holder or high school graduate (view methodology).
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
Updated: 10/04/22.

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.


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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.

Double check for discounts

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
car image
Be smart with your coverage

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.

Coverage Level Avg. Annual Premium
Liability only $703
$500 deductible $1,699
$1,000 deductible $1,493
Updated: 10/04/22.

You can determine the value of your vehicle through Kelley Blue Book and NADA online.

 
 
Use your coverage wisely

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.

 
 
Shop around

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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Ava Lynch photo
Ava LynchSenior Analyst

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior analyst, providing insights and data analysis as one of The Zebra's property and casualty insurance experts.

Ava’s insurance career began as an agent with Farmers Insurance. Over the years, she has become an authority in all things property and casualty insurance, helping her to write informative guides for shoppers.

Ava’s work has been cited in publications such as InvestopediaThe BalanceMoney.comLiberty Mutual, U.S. News & World Report, GasBuddy, Car and Driver and Yahoo! Finance.

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 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.