The Best Car Insurance Companies for Students

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Written by J.J. Starr Edited by Quiana Darden Reviewed by Amanda Clear

Updated February 6, 2023

Getting car insurance for students can be daunting, especially if you don’t know which companies to trust. With so many options and factors to consider, it’s essential to research the best car insurance providers before making your decision. 

As experienced experts in car insurance, we’ve compiled a list of the best auto insurers that offer packages perfectly tailored for those who are in school.  Read on and find out how these top-notch providers work with students to provide some of the best policies.

Key Takeaways 

• Students (and all young drivers) should stay on their parent’s policy instead if they can because it’ll be more affordable
• High school students are the most expensive drivers to insure, and college students fare only slightly better. Graduate students typically have lower rates due to increased financial stability and age. 
• Telematics programs allow students to save money by monitoring driving habits.  Pay-per-mile plans use mileage to set premiums, while usage-based plans track braking, speed, and drive times to set rates. 
• Temporary storage coverage is available if you need a break from your policy during an internship or study abroad program.
• Students can get their lowest premium by shopping around and taking advantage of discounts such as the good student discount.

Best Car Insurance Companies for Students 

Finding the best car insurance for students will depend on individual needs, budget, and preferences. Several excellent car insurance providers have great customer service scores and offer competitive rates and discounts that young adults (and students of all ages) can access.

Below is a list of our favorite best companies for students. 

American Family

Although a smaller provider, American Family packs a ton of perks and advantages for students. The company has a well-reviewed mobile app and an easy-to-use website so students can manage their policies.  Plus, it offers an excellent customer service team. AmFam also has a wide range of discount options designed specifically for students or available to them. 

But, the insurer isn’t available everywhere. American Family’s car insurance is currently limited to 19 states: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Nevada, North Dakota, Ohio, Oregon, South Dakota, Utah, Washington, and Wisconsin.

Students making extra money through a rideshare employer can secure the coverage they need. 

Erie Insurance

Erie Insurance is a regional insurer that operates mainly in the Northeast and Midwest. But don’t let the small size fool you. It excels at customer service and has regularly received some of the highest ratings in the country. The insurer offers a wide range of valuable coverage options and perks, especially when you sign up for the Erie Auto Plus coverage. And even with premium coverage, you can expect an affordable rate. 

But it falls short on its technology. While the company offers a functional website and mobile app, customers have had trouble using them, according to their reviews. There are also fewer discount options available and no rideshare add-on. Even so, Erie is an excellent option for students who live in the service area. 

State Farm

As the second largest insurer in the nation, State Farm offers its customers extreme reliability. Customer service boasts average ratings, the mobile app is easy to use, and the company has the highest financial rating it can get. Claims customer service ratings are also high here, which speaks volumes about how quickly the company responds to customer claims. Plus, rates are usually lower than average, and students have many discount options to save money. 

But State Farm can keep low rates because the insurer offers limited coverage options. For example, students can’t get accident forgiveness or gap insurance here. But for students looking for basic coverage, State Farm is an excellent choice. 

Nationwide

Admittedly, Nationwide has earned lower scores for claims and customer satisfaction compared to other insurers on this list. The insurer also doesn’t offer the most affordable car insurance. But, Nationwide does provide some of the best coverage options, discounts, and student perks. 

First, students can get accident forgiveness, unlimited minor accident forgiveness, and a vanishing deductible when they go a period without filing a claim. They can also access two telematics savings programs. SmartRide rewards students for safe driving, and with SmartMiles, students pay based on the number of miles driven. Nationwide also offers the On Your Side Review, where an insurance agent reviews the insurance policy to determine if you’ve got all the coverage you need, the discounts you’re entitled to, and nothing extra.

NJM Insurance Company

NJM Insurance is the smallest company on our list, and the only mutual insurance company. The policyholders own Mutual insurance, which means customers can receive dividends (cash back). The company is the only one on this list with a Teen Driver Safety program, which teaches teens how to be defensive drivers. You’ll also find rare coverage options, like pet injury coverage, and various discounts. 

The main drawback with NJM is the variability in coverage options, discounts, and customer service. While every insurance company has some variability from state to state, NJM has much more variability than the average company. You’ll have to look at the specifics for your state to know if you can get the coverage you need. 

Progressive

Progressive Insurance is the largest insurer in the nation by market share. The company offers an excellent website and mobile app to help students manage their policies and stay organized. It also provides one of the oldest telematics programs, rewarding students for practicing safe driving. And students can get accident forgiveness plus a deductible savings bank to help them cover the cost of a deductible if they need to make a claim.

But customers aren’t fanatics about Progressive. The company has recently started requiring the total number of household residents, regardless of age, to be listed on the policy. Any driver 16 and older, even if they aren’t licensed, must be on the policy as well. This has led to large premium increases and a lot of headaches for younger drivers trying to get their own policy while living at home. Even though drivers can be excluded from a policy, it still increases rates somewhat. Also, despite great rates and plenty of bells and whistles, Progressive customers don’t report the nation’s best customer and claim satisfaction scores. It is also one of the few insurers that charges a cancellation fee for early termination of your policy.

GEICO

For students concerned about fitting good car insurance into their budget, GEICO is a great option. The company offers low rates and valuable discounts for students. They’ll also get accident forgiveness and emergency roadside assistance at a low cost. Despite being a large insurer, GEICO still performs well on claims satisfaction and manages average customer satisfaction scores. 

But GEICO can keep its rates low because it offers limited coverage options. No gap coverage, vanishing deductibles, or rideshare insurance here. For students looking for a basic auto insurance policy, GEICO is an excellent choice. 

How to Insure a Vehicle as a Student

Insuring a vehicle as a student can be a bit challenging since they may have limited experience and budget constraints. But with some research, it is possible to find an appropriate policy at an affordable rate. Here are some steps to take when insuring a vehicle as a student:

1. Do your research: Decide on the coverage options and limits you need. Identify any special coverage options that are nice to have.
2. Look for discounts: Ask about discounts for students and safe drivers that could help lower your premiums.
3. Consider higher deductibles: Higher deductibles can lower your premium costs but ensure you can afford to pay the deductible if you have to file a claim. Otherwise, your insurance won’t kick in to pay their part of the claim. 
4. Shop around: Don’t settle on one insurance company without doing your due diligence. It’s always a good idea to look around until you find a policy that fits your budget and needs.

Our auto insurance comparison tool makes it easy to quickly find the most affordable auto insurance options. Within 5 minutes you’ll have a list of the cheapest insurers based on your insurance needs.

Factors to Consider When Choosing Car Insurance For Students

Knowing the coverage type and level that suits your needs, understanding where discounts are available, and exploring additional features offered can help you find the best policy for your circumstances. 

Here’s a list of key points to remember when shopping for car insurance:

1. Coverage options: It’s important to consider the level of coverage you need, such as liability, collision, and comprehensive policies.
2. Cost: As a student, you may be on a tight budget, so it’s important to compare the cost of different car insurance policies and choose one that fits your budget.
3. Discounts: Many car insurance companies offer discounts for students who maintain good grades or take driver’s education courses. 
4. Reputation and customer service: Look for a car insurance company with a good reputation and positive customer reviews.
5. Additional features: Some insurance companies offer additional features such as roadside assistance or rental car coverage, which can be helpful for students.
6. Bundling: Consider if the company allows bundling with other policies like home or renters insurance.
7. Extras: Check if the company offers perks such as roadside assistance, affiliate discounts, a mobile app, or online account management.

How Car Insurance Changes When You’re a Student 

Any life change can affect your car insurance, including becoming a student. And there are a few things students can expect when purchasing car insurance. Here are some things to consider:

• Age and experience: Since many students are under 30, they’re often considered high-risk drivers due to their age and lack of driving experience. Insurers often assign them higher rates compared to older, more experienced drivers.
• Discounts: Many car insurance companies offer discounts for students who maintain good grades or drive less. 
• Living situation: If you’re a college student living away from home, your car insurance rate may change due to the change in your location. If you’re living in a city or high-crime area, your rates may be higher than if you were living in a rural area.
• Vehicle type: The vehicle you drive can affect your car insurance rates. As a student, you may drive an older or less expensive vehicle, resulting in lower rates than you’d pay for a newer car.
• Policy changes: As your needs change, regularly reviewing your coverage and comparing rates is important to ensure you always get the best deal. You may be able to adjust or remove coverage as your experience and needs change.
• Bundling: Some companies allow you to bundle your car insurance with other policies like renter’s insurance. This often comes with a multi-policy discount that can help you save on the cost of car insurance.

Ways to Save on Car Insurance When You’re a Student

Finding cheap car insurance when you’re a student is notoriously difficult. Not only do students often pay higher rates due to their age and inexperience but they are also often on a tight budget. But that doesn’t mean they can’t save money. Here are some of the best ways to get the cheapest car insurance as a student:

• Look for discounts: Many car insurance companies offer discounts for students who maintain good grades or take driver’s education courses. Ask the insurance company if you qualify for any discounts.
• Choose a safe car: The type of car you drive can affect your insurance rates. Cars considered safer and less likely to be stolen can get lower insurance rates.
• Bundle policies: Consider bundling your car insurance with other policies such as renter’s insurance. This can help you save on overall insurance costs.
• Raise your deductible: If you’re willing to pay a higher deductible in the event of an accident, you may be able to lower your monthly premium. Just keep in mind if you can’t afford to pay the deductible your insurance coverage won’t kick in.
• Pay your policy in full: Many insurance companies offer discounts for paying a policy in full instead of monthly.
• Drive less: If you can carpool, bike, walk, or use public transportation, you may qualify for a low-mileage discount. You should also consider pay-per-mile programs if you drive fewer than 7,500 miles a year. 
• Keep a good driving record: A clean driving record can help lower your insurance rates. Avoid receiving traffic violations or getting into accidents.
• Compare rates regularly: As you gain more driving experience and your needs change, regularly reviewing your coverage and comparing car insurance quotes is important to ensure you’re getting the best deal.
• Stay on your parent’s policy: If a family member has a good driving record, adding you to their policy can be cheaper than getting a separate one.

Tips to Find the Best Car Insurance Company as a Student

Here are some of our best tips for finding a great car insurance company as a student:

• Compare rates and coverage options from multiple providers. Don’t just rely on one quote; shop around and compare rates and coverage options to find the best deal.
• Look for discounts that apply to you as a student. Many insurance companies offer discounts for good students, safe drivers, and your vehicle having certain safety features.
• Check for customer reviews and ratings to get an idea of the company’s customer service, claims process, and overall satisfaction.
• Look for companies that have flexible payment options.  
• Consider insurers with mobile apps, online quote systems, or other digital tools that make it easy to manage your policy.
• Check the company’s financial stability.
• Ask friends and family you trust for their recommendations. 

What Makes a Car Insurance Company Good for Students?

Ultimately, choosing the best insurance company comes down to matching company features with the driver’s needs. An insurer that’s good for students offers a combination of the following:

• Coverage options: Make sure the company offers the additional coverage options you need, such as gap insurance, pet coverage, or rideshare insurance.
• Additional features: Some insurance companies offer additional features such as roadside assistance or accident forgiveness, which can be helpful for students.  
• Affordable rates: As a student, you may be on a tight budget, so finding a car insurance company that offers competitive rates is essential.
• Discounts: Many car insurance companies offer discounts for students who maintain good grades or take driver’s education courses. Look for a company that offers these discounts, which can help lower your insurance premium.
• Reputation and customer service: Look for a car insurance company with a good reputation and positive customer reviews. A company with good customer service will be able to assist you with any questions or issues you may have.
• Bundle options: Some companies allow you to bundle your car insurance with other policies like renter’s insurance, which helps you save on overall insurance costs.
• Convenience: Car insurance companies that offer online account management and mobile apps can make it easier for students to manage their insurance policies and make payments.

FAQs About the Best Car Insurance for Students

Does GPA affect car insurance?

Typically insurance companies will offer a discount if you have a high GPA. However, they don’t punish you if you don’t get the best grades in school.

How can I reduce my car insurance?

There are several ways to reduce your car insurance premium, such as shopping around for the best rates, bundling insurance policies, increasing your deductible, taking a defensive driving course, maintaining a good driving record, choosing a car with high safety ratings, and reviewing discounts. 

Is it cheaper to insure an old or new car?

Generally, it’s cheaper to insure an older car than a new one. Older cars are typically less valuable and, therefore, less expensive to repair or replace.  

Does gender affect car insurance?

Yes, gender affects car insurance rates. Generally speaking, car insurance providers consider male drivers to pose a higher risk for at-fault claims than female drivers. Male drivers typically pay higher premiums than female drivers, though the difference gets smaller as they age. Some states prohibit companies from using gender to determine rates, including California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania.

J.J. Starr Insurance Writer

J.J. Starr is an insurance writer for Compare.com who specializes in auto insurance and personal finance. She has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand. Prior to writing for Compare.com, J.J was a registered banker and life insurance consultant. She holds a master's degree in writing from New York University and a bachelor's degree from Stephens College.