Getting your first car is a milestone. You may have gotten it when you were still in high school or received it before heading off to college as a new student. The point is that you’re a new driver eager to get some miles under your belt. It’s around this time; you’d think about your first car insurance policy. Let’s talk about car insurance for college students and college-aged drivers.
The Basics of College Student Car Insurance
College students, and young drivers in general, aren’t known to pay the best car insurance rates. Car insurance companies often use young age and the lack of driving experience as grounds for a higher risk driver. The general stat is that drivers ages 16 to 19 are three times more likely to get into an accident than drivers age 20 and up. It’s during this time when the driver is usually a student in school or college. Their car insurance rates will reflect this.
However, you’re reading this because you are a college student and looking to save on the new driver car insurance rates. Maybe there are auto coverage discounts you qualify for as a college student. Or, perhaps the best course of action would be to remain on your parent’s auto insurance policies coverage. So, here’s what car insurance for college students costs, covers, and what the best course of auto coverage would be for a new student driver.
What’s The Average Car Insurance For a College Student?
A teen driver usually receives their license while they’re a student or in high school at the age of 16. Until they turn 20 and have a tangible driving history, their auto insurance rates will be considerably high.
Car insurance companies use driving records to determine different types of insurance premiums. Because new drivers don’t have one yet, the associated risk is often high leading to expensive premiums to maintain their auto coverage. So, drivers who just received their license are generally placed on their parent’s existing auto policy.
Granted, the car insurance premium increases by at least $100, but it’s a more economical option than purchasing their own separate policy. Being covered under existing car insurance is required if the student has a learner’s permit.
The annual cost of new auto coverage for a high school-aged driver and college student can range from $1,700 to $3,500. The cheapest new driver car insurance is around $1,840 according to data pulled from Quadrant Information Services.
When a student enrolls in college, the rates may fall slightly, but they’ll still be in this range. It’s not the grade in school that matters, but the age of the driver. That being said, the school discounts that will be discussed later can apply to both a high school and a college student.
Average Car Insurance Rate For College Students is Not Cheap
There are other factors that contribute to the high car insurance rates for new and student drivers. A nonexistent driving record is a red flag for some insurance providers and a reason for drivers like college students not to be added on to an existing family policy for less.
College Student Car Insurance is Affected by:
- General location - Rates are based on zip codes. If a student driver is going to college, their zip code may change. Thus, they may be subject to different car insurance premiums. Rural communities tend to have lower rates while bigger metropolitan areas have higher rates.
- Age - Car Insurance companies always look at the driver’s age. Premiums decrease when the driver turns between 20 to 25 years old and has more driving experience. Car insurance tends to become more tangible at that age.
- How frequent the drivers drive - If a high school or college student with no driving record is frequently on the road, then the car insurance premium will be higher, along with the chance of getting into an accident.
- Place of residence - If your home address is still listed as your primary and permanent address, then you may remain on your parent’s car insurance coverage. College students checking into dorms may be an exception to this. Those renting apartments in the university town may be required to have their own car insurance.
- Name on car title - When parents buy a new car, they may put their names and/or the student driver’s name on the vehicle title. If the car has both names on it, a college student driver may stay on their car insurance policy. If only the student driver is listed on the title, they may have difficulty doing so and may require their own additional coverage.
Best Time to Get Car Insurance For a College Student
The textbook example of a young driver or college student who needs their own car insurance policy is if they are driving on a full-time basis. At that point, the only way they would be able to stay on their parent’s existing auto coverage would be for the vehicle title to have their name on it –either as co-owners or primary owners. The same goes if the college student is going to school in-state. If they leave the car at home and don’t drive while away, that car could still be covered by the existing policy.
New policies for college students may not be necessary if there are gaps in their auto coverage. For example, a college student decides to leave their car at home after spring break. There’s now a lapse in coverage which can cause car insurance premiums to rise. It would be wiser to be on their parent’s existing policy. Permissive use is a car insurance add-on that covers inconsistent drivers.
There’s no age limit to being covered on a parent’s policy. A good rule of thumb would be to keep all drivers under 25 years old on a family or household policy –when the average rates start to drop. That is usually the amount of time they are college students.
College Student Car Insurance Requirements
Going to an out-of-state school is an important car insurance matter because each state has its own car insurance requirements for drivers and their vehicles. If a student is covered by their parent’s policy, then they exceed these requirements. When shopping for their own car insurance, it’s imperative to know the minimum and optional coverage available, along with the best car insurance they should get.
For most states, liability insurance is a legal requirement. This is the auto coverage that insures personal injuries, with its bodily injury liability part, and property damage, with its property damage liability part, you’ve caused to another driver. In addition, they could also add on rideshare insurance or collision and comprehensive coverage. Collision would cover yourself and your vehicle as opposed to just the other driver’s. Comprehensive insurance covers your vehicle should it be stolen, vandalized, or affected by bad weather. Both of these coverage options can be added for an additional cost. Note that this isn’t the most low-cost car insurance.
Pay-per-mile will be a low-cost option if the student isn’t driving their car often. Most college campuses tend to be closely knit together, reducing the need for college students to drive from class to class. If the car spends a significant amount of time in parking, pay-per-mile car insurance would be the best option. This usage-based insurance coverage would include collision and comprehensive insurance on its own at affordable rates.
Car Insurance in General
Not just college students, but all drivers, in general, are required by law to have a minimum degree of liability car insurance. This is to keep uninsured drivers off the road.
The four types of liability car insurance are:
- Bodily injury - The bodily injury liability coverage is the amount the policyholder pays if another driver is injured in an accident they cause. The average state minimum coverage limits per person are around $15,000.
- Property damage - The amount the policyholder pays if they damage property (public or private) in an accident. The average state minimum per accident is $25,000.
- Personal injury - The amount the policyholder pays for their own injuries and medical costs when involved in an accident. Personal injury car insurance is not required in all states, and minimum costs vary depending on the auto insurance company.
- Uninsured motorist - This car insurance covers the policyholder when they’re involved in an accident with an uninsured or underinsured driver. This isn’t required in all states, and the average per accident tends to be around $20,000.
Best Car Insurance Discounts For College Students
There are a variety of discounts available for college students shopping for their own car insurance at affordable rates. They’re all based on vehicle, coverage, and even personal factors. Some of which can be helped.
Car Insurance Discounts for College Students
- Multi-policy discount - Car Insurance companies offer a bundle discount if more than one coverage is purchased. Some college students buy both renters insurance and car insurance –since they may be renting their own place at school and this is one of the best methods of insurance for them and one of the best methods to save money in insurance monthly rates.
- Resident student discount - If attending school out-of-state, college students can save their parents money by leaving their car at home. A resident student discount is for those who won’t be driving the family car while they’re away.
- Anti-theft discount - Car insurance companies give discounts based on a car’s safety features. Anti-theft devices include alarms, ignition cut-off, or vehicle tracking. Essentially, anything that would deter car thieves. College students will especially want to keep their cars safe while saving on auto coverage monthly rates.
- Good student discount - Good grades will earn more than the honor roll; they’ll earn discounts to college students on car insurance. High school students may be offered the same. Car Insurance companies look for students with a GPA over 3.0. All the more reasons for college students to study.
- Driver education discount - There are driver’s ed and defensive driving courses that car insurance companies approve. Anyone can enroll and be a driver training student, enhance their driving skills and be considered a safe driver. Presenting completion certificates can result in safe driver discounts on new auto coverage rates for college students.
- Payment discounts - Paying yearly premiums all at once instead of monthly can save hundreds of dollars on car insurance. At the same time, direct payments can also get discounts on auto coverage. Car Insurance companies smile upon financial responsibility.
- New car discount - Having a car make and model from the current year can make a driver eligible for a discount. High school and college students often drive fresh new cars. However, it shouldn’t be a luxury or oversized vehicle, which can cause premiums to skyrocket for student drivers.
College Student Car Insurance Cost
The average cost of car insurance is around $900 to $1,100 annually. Paying an average car insurance rate of $75 is usually what motorists in America pay to keep their car insured. When it comes to college students, even cheap car insurance premiums can be more than three times that amount.
For a student in high school or college, the average cost of car insurance would be $3,816 annually. That’s around $318 monthly. The difference is quite vast.
There’s no low-cost alternative for car insurance for a student unless they remain on their household’s existing coverage. The only way to reduce car insurance premiums is to create a consistent and safe driving record.
Over the years, the insurers will take notice and lower the rates. However, another way to save for college students is to start small with pay-per-mile or permissive use car insurance. Using a car conservatively can save on car insurance while steadily building a clean driving record through safe driving habits is a great way for not just college students, but every driver to save on comprehensive coverage and all other types of car insurance coverage options.
Shopping For The Best College Student Car Insurance
Some final wisdom when it comes to shopping for a student driver’s cheap car insurance policy is to think about how much coverage you need.
If you’re going to bundle renters and car insurance to save money, think about how many assets are in your apartment or car and whether or not you would be able to afford it.
Vice versa if you find that you don’t have a whole lot to cover other than your car. Be aware that some policies may sell you more auto coverage than you need.
Lastly, keep track of all the car insurance and student discounts that apply. One discount can save up to 5% on your auto coverage; imagine what a couple more can do.
For More on Car Insurance For College Students
Contact your car insurance agent today and ask what type of auto insurance quote can best cover the college student in your life. If you’re in college yourself, then consider this a course in student car insurance searching for the cheapest car insurance company.