Best Auto Insurance For College Students: Tips And Tricks

Car insurance for college students can be expensive, but there are ways to reduce costs. One way is to stay on a parent's policy, which is usually much cheaper than buying a separate policy. Students can also benefit from various discounts, such as those for good grades, being away from home, or completing a defensive driving course. Comparing quotes from multiple companies is another way to ensure you're getting a fair deal.

Staying on a parent's policy

There are a few things to keep in mind, however. Firstly, if the student is no longer a dependent or has moved out permanently, they will need to purchase their own policy. Additionally, if the student has a poor driving record, it may be cheaper for them to get their own insurance rather than increasing the premiums on their parents' policy.

It's also important to note that the rules and regulations regarding car insurance vary from state to state. For example, some states may require out-of-state college students to get their own policy, while others may allow them to stay on their parents' policy as long as the parent's residence is their primary address.

Advantages:

• Cost savings: Sharing one policy is usually more affordable, as the cost of certain coverages can be split.
• Convenience: With a shared policy, there is no need to worry about which car is being driven, as both the student and the parent are covered when driving each other's cars.
• Continuity of coverage: By staying on their parents' policy, students can maintain continuous insurance coverage, which can lead to reduced premiums when it's time for them to obtain their own policy.
• Ease of management: Managing a single policy is often simpler than managing two separate policies.
• Coverage during breaks: The student will be covered when they return home for breaks without needing to make any changes to the policy.

Considerations:

• Address requirements: To remain on a parent's policy, the student usually needs to keep their parents' home as their permanent residence or primary address.
• Usage and location: If the student is not bringing a car to school and does not plan to drive during breaks, it may be more cost-effective to remove them from the policy.
• Increased premiums: Adding a student to a parent's policy may result in higher premiums, especially if the student is under the age of 25.
• Driving record: If the student has a poor driving record, it may be more advantageous for them to obtain their own policy to avoid increasing premiums on the parent's policy.
• State regulations: Some states may have specific requirements for out-of-state college students regarding car insurance.

It's always a good idea to consult with an insurance agent or representative to determine the best option for your specific situation. They can help you navigate the various discounts, regulations, and coverage options available to find the most suitable solution.

Discounts for good grades

Many insurance companies offer good student discounts, which can help to reduce the cost of car insurance for college students. To qualify for a good student discount, students typically need to maintain a B average or a 3.0 GPA, or rank within the top 20% of their class. Some insurers may also accept scores in the top 20% on standardised tests such as the PSAT, SAT, or ACT.

• State Farm: 7% good student discount, with a 16% discount for students away from home.
• Geico: 5% good student discount, with a 20% discount for students away from home.
• Progressive: Teen driver discount, with a 10% average good student discount.
• Allstate: 20% good student discount.
• American Family: 5% good student discount, with a 16% discount for students away from home.
• Auto-Owners: 8% good student discount, with a 14% discount for students away from home.
• USAA: 3% good student discount, with a 10% discount for students away from home.
• Esurance: Good student discount.
• Liberty Mutual: Good student discount, with a discount for students away from home.
• The Hartford: Good student discount.

Discounts for students away from home

Many insurance companies offer discounts for students who live away from home. Here are some of the best options:

State Farm

State Farm offers a "student away from school" discount, in addition to good student and driver's education discounts. State Farm also has two telematics programs, with Steer Clear® tailored to newer drivers. The program monitors driving behaviour and includes a driver training course, which typically leads to lower rates upon completion.

USAA

USAA offers a "student away at school" discount, as well as good student and driver training discounts. USAA is only available to military members, veterans, and their families.

Geico

Geico offers a "student away from home" discount of 20% on average, in addition to good student and driver's education discounts. Geico also offers a usage-based insurance policy, DriveEasy, for students who rarely use their vehicle while at college.

Progressive

Progressive offers a "distant student" discount for students 22 or younger who attend a school 100 or more miles from home and don't have a car at school. They also offer a "teen driver" discount for drivers 18 or younger.

Travelers

Travelers offers a "student away at school" discount for students who live more than 100 miles away from home and don't regularly drive a car insured on the policyholder's policy.

American Family

American Family offers a "student away from home" discount of 16% on average.

Auto-Owners Insurance

Auto-Owners Insurance offers a "student away at school" discount of 14% on average. To qualify, the student must be more than 100 miles away from home and without a car.

Discounts for safe driving

Safe driving discounts are a great way for college students to save money on their car insurance. While the criteria for these discounts vary by state and insurance company, there are a few general guidelines to follow.

Firstly, safe driving discounts usually require a proven track record of accident-free and violation-free driving. This means avoiding any moving violations, such as speeding tickets or running red lights, and maintaining a clean driving record. Additionally, some insurance companies may offer discounts to students who take proactive measures to improve their driving skills, such as enrolling in a defensive driving or driver education course. These courses help students become more responsible and safe drivers, which can lead to lower insurance rates.

Another way to demonstrate safe driving is through the use of telematics programs, which monitor driving behaviour through a mobile app or a device installed in the car. These programs can track factors such as speeding, hard braking, and phone usage while driving. While they can lead to significant savings, it's important to note that they can also raise rates if unsafe driving behaviours are detected.

It's worth noting that safe driving discounts may not take effect immediately. Insurance companies typically require a proven history of safe driving, usually for at least three to five years, before offering a discount. This means that college students need to consistently demonstrate safe and responsible driving habits over a period of time to qualify for these discounts.

In addition to safe driving discounts, college students can also take advantage of other discounts offered by insurance companies, such as good student discounts, student away from home discounts, and driver training discounts. By combining multiple discounts, students can further reduce their car insurance costs.

Comparing quotes from multiple companies

Understand the Factors Affecting Your Premium

Before comparing quotes, it's helpful to understand the factors that influence your insurance premium. These include personal factors such as age, gender, driving history, credit history, vehicle type, and location. Knowing these factors will enable you to make more informed decisions when comparing quotes.

Gather Your Information

To streamline the quote comparison process, have the following information ready: personal details (name, date of birth, address, etc.), driving history (any accidents, violations, or completed driving courses), vehicle information (make, model, year, mileage, and Vehicle Identification Number), and insurance history. Having this information on hand will make it easier to provide consistent details across different insurance companies.

Choose the Right Liability Coverage Levels

Liability coverage is essential for protecting your assets in the event of a serious accident. When comparing quotes, pay close attention to the liability coverage levels offered. Select a policy with liability limits that are equal to or greater than your net worth. You can use a net worth calculator to determine your net worth if needed.

Decide on Full Coverage

Full coverage insurance typically refers to policies that include liability, collision, and comprehensive coverage. Consider whether you need full coverage, especially if your car is not yet paid off. Collision coverage pays for damage to your car in an accident, regardless of fault, while comprehensive coverage protects against damage from weather, animals, and vandalism.

Collect and Compare Quotes

Obtain quotes from at least two or three insurance companies, including both large national providers and regional insurers. Ensure that each quote includes consistent information, such as the same levels of liability coverage, deductibles, drivers, and vehicles. Also, take into account any discounts you may be eligible for, as these can significantly impact the final cost of your policy.

Understand the Quoting Process

When comparing quotes, understand the difference between a "quote" and a "rate." A quote is an estimated price based on the information you provide, while a rate is the adjusted price after the insurance company applies its pricing model. The final price you'll pay is called the premium.

Focus on Reputable Companies

While price is important, it's not the only factor to consider. Choose an insurance company with a good reputation and strong financial standing. Check customer reviews, complaint records, and financial strength ratings to ensure the company is reliable and will be able to pay out claims.

Frequently asked questions