Question: Is it normal for car insurance rates to increase after graduation? My State Farm car insurance premium skyrocketed after graduation because I lost the “Good Student” discount. This strikes me as extremely odd because one should expect the risk of accident to go down after graduating college, not up. Most insurance companies advertise that people can expect lower premiums after graduating from a university. But State Farm only rewards current students, not graduated students. Should I switch insurance companies?
Answer: There are so many different insurance companies out there and each of them offer a variety of discounts. It can be very difficult for someone to know or be able to find out which company would offer them the best rate at a certain point in their life. These discounts and criteria are always changing for each company over time and can even change from year to year. That is why I always recommend discussing your current situation and insurance needs with a local personal insurance brokerage like Smart Move Insurance in Scottsdale, Arizona.
Unlike a State Farm, Farmers, Geico and American Family agents that are captive to the products they can offer to you. This can lead to a biased opinion on what is the right coverage for your needs and price that you should be paying. An independent agent has the ability to shop your insurance with over 15-20 different companies therefore always finding you the right coverage at the best price.
Many auto insurance companies offer a good student discount which can range from 10%-30% depending on the insurance carrier. Once you graduate, you will usually lose this discount on your next renewal. Some companies will offer a “college grad” discount but this will usually range from 5%-10%. Therefore you may tend to see an increase in your premium especially from a company like State Farm that offers on the higher end of the good student discount. If you talk to your local broker they should be able to find you a great company that will offer you a larger college graduation discount and offer lower premiums based on your older age than State Farm or another captive agency.
Reposted from Quora.com
