by Ed Sneneh, Chicago Car Insurance Agent
Insurance Navy, 4717 N Pulaski Rd, Chicago, Illinois, 60630

What is so special about auto insurance for part time or good students, and is there really something called student auto insurance?  The direct answer to this question is 'No.' There is no such thing called 'student auto insurance' or even auto insurance for students. So what's the story behind these brands?

Like all other fields, the auto insurance industry relies on marketing techniques to reach its present and potential customers. Branding auto insurance in a 'student' package is a strategy that marketers call 'insurance market differentiation' . In other words, insurance companies and agents use this term to 'package' regular car insurance to students in order to appeal to their taste and needs.

Characteristics of Student Car Insurance

The main characteristics of car insurance for students are exactly similar to the regular insurance for the general non-student population. However, insurance companies and agents provide special attention to the special needs of students, such as:

  • Good Student Discounts. Those who maintain high GPAs (ie B or better, for example) may get some discounts from certain, and not all, insurance companies. Many companies may apply good student discounts to only certain aspects of the coverage on the specific car that is assigned to that student. For example, if Good Student Discount is 10%, and we have a policy with a total of $1,310 every six months of which is $325 for the liability of the vehicle driven by the good student on the policy, then the discount will apply to the premiums levied on the student's vehicle, not the entire premiums. Note that all companies require proof of 'good student' such as school report card.
  • Student Away from Home Discount. Certain insurance companies may give discounts of 10% or 15% of premiums of vehicles assigned to part time, occasional student drivers who reside 100 miles or more from the garaging locations of insured vehicles, with no direct access to the vehicles on the policy. Again, the discount rate applies not to the total premiums of the policy, but to the vehicle assigned tot that student driver.

To promote their insurance products, insurance agents and agencies use the terms that appeal effectively to the 'target market.' Whether there is really special auto insurance for students is disputed.  Students should not focus on the name or title of package, but, like all other market segments, they should focus on the need and price of the car insurance policies offered to them.

Students are encouraged to shop and get quotes from several sources. Comparison of auto insurance quotes should be based on the following:
  • The need of the student driver
  • The budget of the student driver, and
  • The quality of insurance services offered by company and agent.

Students need insurance like every one else to comply with the law and to meet their social and legal  obligations to the society (social and financial responsibility needs.) Unlike wealthy individuals, students may not need very high liability limits; high limits that are meant to protect one's wealth, including potential wealth.

Student budget is another issue. Unlike other people with good incomes students have limited incomes and, for that reasons, lots of extra coverages that may be included in the regular auto insurance (towing, rental, bond cards, etc.) are perhaps unjustified. Cheap auto insurance for students is one of the most appealing aspect of auto insurance marketing.

Quality of insurance company offering the insurance and the services of the agent should be the focus of all insurance shoppers, including students. Several institutions including GD Power, AM Best, local Better Business Bureau, online reviews, etc may offer some indications about the quality of services of insurance companies and agencies.
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