Auto Insurance 101: The Complete Guide to Car Insurance for College Students
In This Article:
- How does car insurance work when students leave for school?
- Should students have their own policy?
- Should students stay on their parents’ policy?
- Can parents keep insurance on a car in another state?
- When should you leave your parents’ policy?
- Things college students should consider
- Cheapest car insurance for college students
- Car insurance discounts for college students
- Other ways college students can save on car insurance
- Frequently asked questions
So, You’re Going Off to College…
Big challenges and important decisions await college students and their families when it’s time to go off to school. As you move to a new area or state, start working on campus, and begin studying like crazy for coursework and exams—your auto insurance is probably not your top priority.
But, understanding how car insurance works for college students can help as you look toward the future and away from the dangers of being uninsured. So you can put focus back on the biggest tasks in life, read this guide to find cheap car insurance rates for college students.
And if you’d rather skip the reading part and find the cheapest rates in minutes, just enter your ZIP below.
How Does Car Insurance Work when Students Go Away to School?
It can be tough to decide how to handle car insurance as a student between home and school. Parents also struggle to decide what to do when their sons and daughters start to live with more independence—car or not. What happens when students go off to school depends case by case. Some keep their insurance, and some don’t.
They might return to the semester away without a car, and it could seem like a good idea to drop their auto insurance policy. Removing them from a parent’s policy could mean saving money on premiums, but what if they return during breaks? Or, what if the student drives another person’s car while at school?
Since there are many situations when a college student will drive and need essential coverage for possible accidents (even if it’s not their own car), it’s important to explore when to keep them on your policy, when they should get their own, and how to handle the details of coverage.
Should College Students Have Their Own Auto Insurance Policy?
Families can decide it’s best to have separate policies for personal, financial, and technical reasons, but whether students should get their own auto policy really depends on the situation.
It may seem reasonable at first for a student to want distance and independence from their family’s car insurance plan, but the costs of higher premiums can easily outweigh the benefits of ownership.
In some cases—like when they’re on their car’s title or driving in states with different legal requirements—the case is clear. You’ll have to decide for yourself. Read on to see when owning beats sharing.
Should You Stay on Your Parents’ Car Insurance?
If you’re a student, you and your parents could debate keeping you on their auto policy. Parents might first assume that if you don’t have a car while away at school and possibly even leaving the state for much of the year, then car insurance probably isn’t necessary. But many reasons make staying on their insurance a smart choice for everyone.
To start, if you’re actively listed on their policy, you’ll still be fully protected when you return home for the weekend, on a break, or over the summer. Then, if there’s even the possibility that you’ll need or want to drive a friend’s car while you’re away, you’ll need proper insurance anyway.
Even if you’re not driving on breaks or during the academic calendar, you’ll be protected from accidents when someone else is at fault. That means that while you’re biking, walking, or riding in someone else’s car, you still have the financial protection of their car insurance to cover the great expense of accidents and injuries.
Another primary concern that parents and students have is coverage history. When a driver has gaps in their coverage from time to time, insurance companies charge significantly higher premiums. If you’re a student without your own policy yet, you can save in the future by having your parents maintain your insurance even while you’re away, even if it just means keeping minimum coverage.
Can Parents Keep Insurance on a Car in Another State?
Young people who move out and inform the insurance company can be allowed to keep coverage through a parent’s car insurance. So, as a student attending an out-of-state college, you can usually stay on a parent policy as well.
Regardless of the state, college, or situation, it’s important to keep the insurance company aware of where you live since they could deny an insurance claim if you “misrepresented the driver.”
They can keep you on their policy safely by always telling the auto insurer where you live. This way, if you go away to college and move out, you don’t run the risk of getting a claim denied. Finding out for the first time that the insured lives at a different address (and especially in a different state) could mean everyone’s policy gets canceled. No bueno.
When Should You Leave Your Parents’ Policy and Get Your Own Car Insurance?
Auto insurance is complex, and whether a student should get their own car insurance policy is an important but complex one. As you work through the decision, consider at least three top features of your vehicle ownership, driving, and lifestyle:
- Who is on the title of the car?
- Where is the insurable car stored?
- How much does the car get driven?
When parents are the owner of the car (according to the title), it’s easy to stay on their policy (and help out by giving them school-related discounts). But, when the student has their name on the title of the car, many insurers will make it necessary to get a unique, individual policy to cover the damages and expenses they’re liable for. This is because whoever is listed takes on the financial responsibility in an accident, damages property, or injures someone—even if the title owner isn’t driving.
If you take the car to college with you, an insurance company will ask where you store it and make decisions about how to cover you based on the state and neighborhood. If a family has a policy in one state and the student’s car will be in another, there may be different coverage limits in the new area. That’s why you may need a unique policy: you must meet the legal minimum for car insurance in the state the car is stored.
Many full-time students don’t need to drive too often since so much is on campus. But, if you’re not living on campus and have fewer options for getting to and from class, you might be using the car enough to warrant your own coverage. This can be a good idea if you also happen to have an off-campus job.
If it makes sense to get separate car insurance based on who’s on the title, where the school is, and how much the car is used—you can save tremendously when you use Compare.com to shop for car insurance. Even if a unique policy isn’t needed, parent policyholders can save on auto insurance through easy discounts for college students. Just enter your ZIP code below and get your free quotes in minutes!
Things College Students and Their Parents Should Consider
Planning for the start of school is tough (just like making smart car insurance choices). As families think through the puzzle of whether to keep a student covered by the family policy or to plan for an individual coverage option, parents and college students should answer a few questions, including:
Do You Need Your Car at College?
Cars can mean power and freedom. College can too. And there are lots of ways the two either work together, or even clash. While there are benefits to having the flexibility and access that a car gives students, these drivers also sometimes suffer parking issues, tighter budgets, and unexpected expenses like maintenance costs.
Students who don’t live on campus may need an efficient and dependable way to commute to class. Without it, they may also not be able to take advantage of distant internships or jobs that help them support themselves while at school.
Otherwise, a student could simply want a way to explore, leave the campus, and be able to enjoy weekends. Students sometimes need a car to succeed at school, and others just find it convenient. At the end of the day, it depends on your situation.
Will Your Car Stay at Home?
The best choice may be to leave the car at home if the cost of maintaining it will strain the academic experience. When funds are tight, a car could be a hassle and hard to handle with gas prices and parking permit fees as well. Without taking care of these easily and on time, students can quickly rack up problems and parking tickets.
Unless it’s obvious and necessary that the car goes off to college too, many students accept that they can live without their car (and its potential troubles) while they are away. In these cases, it makes sense for families to discuss policy options and find ways to keep the student insured if they can get a good deal on car insurance through student-centric coverage from student organizations and alumni associations.
Consider a “Student Away at School” Policy
There are ways to keep a student insured under a shared car insurance plan when they leave for school by communicating with their current insurer. Sometimes it doesn’t make sense to remove a student from the family policy, and insurance companies understand it protects everyone and means positive, continuous coverage.
They give reduced rates for students away at school that are up to 30% off when, for example, they are over 100 miles away. If your insurance company doesn’t see your situation and won’t offer this deal, you can shop for the cheapest car insurance and find the best car insurance for you and your student’s needs.
How Much Will You Be Driving?
Just like any driver, students take on more risk the more they drive. If it doesn’t benefit the family or student to drop off the policy or get an individual plan, they should consider how much they’ll ultimately drive and what that means.
For example, a student may qualify as an occasional driver when they drive less than 25% of the annual mileage on the car. With this option, premiums can be reduced to a certain amount, and if they drive much less, it can make sense to look at special per-mile coverage.
Consider “Usage-Based” or Pay-Per-Mile Car Insurance
Students who drive little and primarily store their car at home while they’re on campus may benefit from a car insurance policy that uses premiums calculated by how much (or how little) they actually drive. While insurers usually form insurance rates based on applicant factors like age, record, model, and more—they can also factor in the safety of not driving often.
By setting premiums according to mileage limits on an annual basis, students who need an individual policy can save money while giving themselves the security of legally satisfying insurance. Insurance companies can use modern apps on the student’s phone or install a device on the car (often referred to as telematics) to track miles and make the lowest possible premium offers.
Cheapest Car Insurance for College Students
When a college student needs their own car coverage because of higher state requirements, driving needs, title ownership, or even unwilling parents—it’s not always easy to find and compare affordable quotes. Too many just follow what their parents have chosen, going with the same insurance company. Instead, we’ve compiled the cheapest college student car insurance rates according to all the quotes collected from our users:
| Carrier | Avg. Yearly Premium | Avg. Monthly Rate |
|---|---|---|
| Commonwealth Casualty | $889 | $74.05 |
| Clearcover | $1,222 | $101.87 |
| GAINSCO | $1,335 | $111.24 |
| Direct Auto | $1,404 | $116.97 |
| Infinity | $1,408 | $117.31 |
| Dairyland | $1,440 | $119.99 |
| Mercury | $1,489 | $124.06 |
| Safeco | $1,502 | $125.20 |
| SafeAuto | $1,665 | $138.76 |
| Liberty Mutual | $1,884 | $156.98 |
Low rates like those from Commonwealth Casualty, Clearcover, and GAINSCO show that it’s very achievable for college students to own their own policy, even if they’re on a budget. Even more recognized names on our list, like Dairyland, Safeco, and Liberty Mutual, make it sensible for students and first-time policyholders to start consistent coverage, all while saving money.
Compare the lowest car insurance premiums for college students, and you’ll see that the average monthly premiums like these can give rare access to car insurance for those who are just starting to explore their life passions, interests, and career.
Car Insurance Discounts For College Students
Whether it’s a premium discount for those studying far from home or for getting good grades in classes, students and families can save with education-related rebates. You may not immediately be aware that educational activity and performance can reduce your premium, but many insurers offer great percentage-based price cuts in addition to the often-advertised good grade discount.
- Membership Discounts. Some groups offer more than a feeling of fraternity by including car insurance premium cuts as a perk of membership.
- Association Discounts. Certain student, teacher, and alumni organizations provide reduced rates for their members.
- Good Driver Discounts. By taking driving classes and not getting into accidents (especially if you don’t drive much at school), you could save money.
Good Student Discounts
There are perks to being a busy, full-time, and hard-working student. With a 3.0 grade-point average (or higher), your premium could be reduced for the “Good Student Discount.” Usually, you just need to provide a transcript copy or letter from their school advisor. Savings vary, but it’s great to be rewarded for hard work.
How Else can College Students Save on Car Insurance?
Being a college student and an individual policyholder aren’t always two competing priorities. Well-discounted car insurance is possible for students who maintain a clean record, belong to popular academic groups, take additional instruction, and choose wise plans that fit their driving profile.
Practice Safe Driving
Safe driving saves. Even though premiums and coverage change from insurance company to insurance company, most reward a positive driving history without tickets or incidents. Top insurers like Allstate, GEICO, and Farmers give all kinds of price cuts with special programs and accident-free time.
Those like GEICO reduce rates by as much as 26% for drivers without an accident for five years or more, but you can also save indirectly. For example, companies like Allstate give reward points to drivers with great habits to use in exchange for gift cards.
Look into Affiliate Discounts from Your Sorority, Fraternity, Honors Society, or Alumni Association
Students will naturally join a group or two to stay active on campus, meet potentially lifelong friends, and achieve educational goals with a sense of purpose. If one of those groups is a sorority, fraternity, or honors society, they could be in luck with car insurance.
Other organizations include the university itself and, ultimately, being an alumnus. Though not all groups and organizations through the school will bring these premium reductions, looking into it can add up (in a positive way).
Take a Driver’s Education or Safe Driving Course
Young drivers often have the time and determination to strengthen their driving and grab lower car insurance rates. Added driving instruction like a defensive driving course helps them lower insurance premiums that are already inflated because of their age.
Some states even require insurance companies to give discounts for this kind of improvement, and many insurers offer percentage-based rebates through special driving programs that track your driving, show you videos, send you quizzes, and all.
Consider Pay-Per-Mile Insurance or Telematics (especially if your car is at home)
With low-mileage driving comes low-premium policies. With pay-per-mile insurance, students can get the comprehensive coverage they need for a premium that drops with the miles they drive each year. This is great for young drivers who fall into a higher risk category simply because they are under 25 years old.
Instead of just waiting for a better premium, students can choose one of these mileage-based plans.
One of the ways students can take one of these money-saving policies is through telematics, a system that collects driving and habits to create a personalized plan. This option often fits college students better than the usual statistics for their age group. They can even win rewards and additional discounts for demonstrating safety on the road.
Car Insurance for College Students FAQs
What is the cheapest car insurance for college students?
Rates change all the time with every policy provider, but Compare.com collects rates and policy information from all kinds of car insurance companies—big and small. We show users the cheapest car insurance every day.
Right now, we think Commonwealth Casualty is set to stay the most competitive with an average monthly rate well below $100. That’s impressive since the other cheapest insurers are in the triple digits. Check out the lowest rates today.
Do college students get discounts on car insurance?
Though they sometimes pay more in the beginning, insurance companies value college performance and participation. You can get discounts for all kinds of academic activity from getting good grades, having letters attesting to your achievement, and joining sororities, fraternities, honors societies, and more.
Many college-aged policyholders also get discounts for going to school out of state, taking driving classes, and joining unique insurance programs. Beyond these, they can save with more traditional reductions like having a safer vehicle than most.
Is it cheaper to be on a parent’s car insurance?
In general, students under 25 years old find it cheaper to stay under their family’s car insurance plan. Buying their own policy means accepting that insurers will view them as more risky drivers and give them higher premiums as a consequence. While they can still save with education- and activity-related discounts, being kept on a parent’s insurance makes sense for many college students who have other expenses to balance.
How long can I stay on a parent’s car insurance?
There is no age limit for staying on your parent’s auto insurance. Still, you must meet certain conditions to qualify, such as going to school full-time or living with them. It also helps if your car title isn’t under your own name and you share the car.
Where can a college student apply for car insurance?
Knowing where to shop for car insurance can make life a lot easier so you can focus on applying quickly (and getting discounts for good grades). The first step is to collect estimated premiums from any insurer you choose, and then you’ll know where to apply. Get cheap car insurance quotes from Compare.com to start finding the best deals.
The best part? You can do it all right from the comfort of your dorm room.
