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Car insurance for college students

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Drivers under the age of 25 face some of the highest car insurance costs of any age group in the US—mainly because they are involved in a lot of accidents. However, that probably doesn’t keep many young men and women from taking cars with them when they go to college.

The good news here is that there are various steps one can take to minimize the impact that insuring a college student's vehicle will have on one’s wallet (regardless of whether it’s the wallet of a parent or a college-bound child):

Consider going without collision or comprehensive coverage

This piece of advice is only aimed at college students (and their parents) who drive cars that are old and used enough that paying for these forms of insurance coverage—as opposed to liability coverage—is an unnecessary expense at best, and a waste of money at worst.

In part, that's because collision coverage, for example, usually only covers the cash value of a vehicle, so in the case of an older car, the monthly, semi-annual, or yearly premiums you're going to pay probably will exceed the value of the car.

Raise your deductible

If your vehicle is still worth enough that dropping your collision and comprehensive coverage isn’t a good idea, you could still raise the deductible associated with that coverage. That would lower your premium payments and, again, allow you to hold onto some of your hard-earned cash. Raising your deductible is probably the easiest way to lower your insurance rates. Find out how much it could save you by comparing rates from top companies.

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Leave the car at home, if possible

If you're a soon-to-be student, the best thing you can do for your budget is not to bring a car to school with you. That's true even if you already own a vehicle but decide to leave it with your parents while you're away.

After all, says Ray Crisci, worldwide auto and excess liability manager for Chubb Personal Insurance, many insurers "give auto insurance customers a discount on their auto policies if the student is 100 or more miles away from home without the car."

Should you go this route, though, be sure to let your insurer know about it—and also let them know if the car will be left in a garage except for when you come home for visits, or if it'll be driven by someone (your parents, a sibling, etc.) in the meantime. Another smart step to take is to make sure your child is properly insured as a college student. 

As an added bonus: if your college is located 100 or more miles away from home and you choose to be car-free, your premiums may be reduced by up to 20 percent while still providing coverage when you return home during breaks or even when you borrow a vehicle while on campus.

If you must own a vehicle, drive it as little as possible

Another way to earn a premium discount or rebate—or at least keep related expenses at bay—as a car owning college student is to limit your driving and instead walk, bike, carpool with friends, or use public transportation as often as possible.

Be smart about where and how you park it

Chubb's Crisci also stresses the importance of following parking regulations while at school if you want to keep your car insurance premiums as low as possible. "Campus police departments are known for their propensity to ticket or tow parking violators," he says. "Also, a car parked on campus is most vulnerable to theft. Often, it is parked in an unguarded lot on campus, so [don't] leave valuables--such as a laptop, a GPS, or a camera—in your car because these valuables can attract a thief’s attention."

Don't lend your car to friends or classmates

This is especially important when alcohol is involved, as a number of liability issues could come into play if you make the wrong decisions after you or your friends have had a few drinks. As a young college student, there are many things to consider about your car before letting someone else slide behind the wheel.

Consider, for instance, a scenario in which you ask a friend to act as a designated driver and then allow him or her to borrow your car. Unbeknownst to you, "the designated driver also has been drinking and then is in an accident with another car," Crisci says. "Not only are you responsible for the property damages done to the other person’s car, but if people are injured in the accident, you now have liability exposures to those injured in the accident. If someone was killed in the accident, surviving family members may sue you. Thus, alcohol-related accidents can cause a significant personal and financial risk for all involved."

Stay on your parents' insurance

If the vehicle you wind up taking to school with you is owned by your parents, it may be in both of your best interest for it to be added to your parents' insurance policy (if it isn't already).

And of course it could be a good thing for you, too, because it likely would save you a bunch of money—even if your parents make you pay your portion of their bill, as that amount's still sure to be less than what you'd be charged if you took out your own policy.

Buy an older car

Driving as little as possible and taking advantage of your parents' multi-vehicle discount aren't the only ways to save money on car insurance while completing your studies. Buying an older used vehicle instead of a new one can go a surprisingly long way here, too, as doing so will keep your premiums to a minimum.

In addition, if the vehicle you purchase and take to school with you is old enough, you might decide to forego paying for comprehensive or collision coverage--or both--and save even more.

Don't buy an SUV, convertible, or sports car

That is, don't buy them unless you or your parents are OK with spending a lot more for car insurance than you would if you bought something smaller or less flashy.

After all, each of the vehicle types mentioned above, along with any other kind of car that's prone to accidents or speeding tickets, usually cost more to insure than your average compact, or sedan.

Make sure the car you take to college includes anti-theft or security features

In general, the more types of "vehicle safety equipment" that can be found in a car, the lower that car's insurance rates are likely to be.

This means, of course, that the flip side is true, too—if your car has few or no anti-theft or security features, you’re probably going to pay more for car insurance.

Some of the equipment that can help you (and your wallet) here: alarm systems, anti-lock brakes, automatic seatbelts, daytime running lights, driver-side and passenger-side airbags, electronic stability control, and rearview cameras.

Complete a defensive driving course

Some car insurance providers offer discounts to people who go through a defensive driving course or driver's education program. If that sounds good to you, check with your insurer to see if that's something it supports—and if it does, ask them exactly what you need to do to earn the related discount or rebate. (Do you need to participate in a particular program, for instance? Perhaps, you need to show some kind of proof that you completed it.)

Get good grades

Many insurance companies will offer young adult customers (or their parents, depending on who's footing the bill) a reduced rate if they can prove they're full-time students and they achieve a B or better--3.0 and above--grade point average.

These reduced rates can be up to 20 percent lower than what drivers between the ages of 16 and 25 would receive otherwise, depending on the insurer. As a result, be sure to let your agent know if your student has a high GPA.

Keep your insurance company in the loop

This piece of advice goes hand in hand with the one shared above. That's because there are other "life events" that can result in you (if you're a college student, or at least of that age) paying less for car insurance than perhaps you currently do.

Simply getting older can be enough to earn some sort of discount, as can life changes like getting married.

So, don't be shy about updating your insurance provider about various aspects of your life if you think they could help lower your premiums.

Shop around

One final, vital tip that should be taken to heart whenever you or your young adult children go to buy any form of insurance, but which can be especially helpful when you or they go to buy auto insurance, is to shop around and compare quotes from a number of insurers before choosing one option over another. The benefit of this legwork: it will ensure that you end up with the best possible rates on the right amount and types of coverage.

Frequently Asked Questions

Q: Do I have to tell my insurance company that I'm taking my car to college with me?

A: Yes, especially if the school you're attending is located outside of your home state or if it's closer to an urban area than where you currently live.

Regardless, though, this is the kind of information you really need to share with your insurer. Failing to do so could get you into hot water—as in, they could deny future claims later, if something should happen to your car.

Q: Will where I go to college affect my car insurance rates?

A: Yes. Basically, the more urban the campus, the more expensive your car insurance rates are likely to be, while the more rural the campus, the less expensive they’re likely to be—thanks in large part to the crime, traffic, and even parking differences between these two different landscapes.

Q: My son is moving out of state to go to college. He's planning to buy a car when he gets there. Can I still add him and his new car to my insurance policy?

A: Probably not. Although some insurance companies will extend out-of-state coverage to customers in certain situations—with "temporary" stints as college students being one of them—it's unlikely yours will offer that kind of flexibility in this case. After all, most insurance companies do not allow people to insure cars registered in someone else's name.

Of course, nothing is keeping you from sending your son checks to cover his premium payments; if you want to.

Q: My college age daughter thinks she can be added to her boyfriend’s parents car insurance policy. Is she right?

A: For starters, this is a question you or your daughter should pose to the insurance provider.

That said, it seems likely that the parents of your daughter's boyfriend could add her to their car insurance policy—so she can use one of their cars--assuming that's what everyone involved is interested in doing.

Q: My son just left for college and doesn't have a car. His insurance company wants him to change his address or surrender his driver's license. Is that legal?

A: Whether it's legal or not really isn't a question that can be answered here, unfortunately. That said, it seems unlikely that an insurance company would have the authority to force your son to give up his license. They could suggest it, of course, but that doesn't mean he has to go along with it.

Did all of this come up after you tried to get your son’s name removed from your policy while he’s away at college? If so, that would make sense, as your insurer probably wants some kind of proof that he won’t continue to drive one of your vehicles while at school. Given that, it’s likely they won’t remove his name from your policy until you can provide that proof.

Q: My brother is heading to college and I want to let him use a car that's titled and registered in my name. Can I add him as a driver on my insurance policy?

A: If you’re not transferring the title to your brother but he’s still going to drive your car on a regular basis, you should add him to your policy. Ask your agent or insurance company if you need help with this.

Just be warned that adding another driver to your policy like this can cause your premiums to increase. Also, don’t forget that in the end you will be held responsible for anything that happens while your brother is driving your car.

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College students can save on car insurance! Click to compare rates instantly →

Labor Day is over, your pencils are sharpened, and lying poolside is just a memory: That’s right, it’s officially back-to-school season. Many student drivers, especially in college, may not know much about the process that is car insurance, because—let’s be honest—lots of students are lucky enough to have their parents take care of that nonsense. However, understanding car insurance is crucial for many reasons—plus, no one wants Mom and Dad to take care of them forever, right? So consider class in session.

First Things First: Which Car Do You Need?

Let’s start with the basics: car buying. When perusing the car lots, keep in mind that the type of car you decide on has a huge impact on how much your car insurance will cost. Need proof? Forbes just named the Jeep Wrangler Sport the cheapest car to insure in 2014, while the most expensive was the Nissan GT-R Track Edition, clocking in at a staggering premium of $3,169. As a bonus, U.S. News and World Report‘s Jamie Page Deaton reports that companies like Honda that make cars that are affordable to insure also “offer new grads or students that are four months away from graduating and who have employment offers flexible lease and financing terms on new and certified pre-owned Hondas.” Toyota and Acura offer similar financing options. Besides the make and model you choose, other things that will keep your car insurance rates low include buying used and selecting safety features like anti-theft systems and anti-lock brakes. This handy chart details which insurance gives discounts for which safety features.

The Single Easiest Way to Save as a Student

So now that we have our car, let’s talk insurance. Unfortunately, the statistics show that for drivers under the age of 25, there’s a significantly higher risk for accidents. As a result, the age group of 16 – 25 year-olds will face the highest insurance rates in the country. The only other age group that comes close is 85+! Perhaps the easiest way to save a ton on your insurance is to hop on your parent’s policy, as many insurance companies offer multiple-policy discounts that Mom and Pop may be utilizing. If that’s not an option for you, consider checking out pay-as-you-go insurance, like Metromile.

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Hit the books & study up to save.

Other Insurance Savings

So whether you’re on your parents’ policy or you’re doing it for yourself—how can you save some bucks? The great news is that many car insurance companies offer discounts for students: Generally speaking, the “good student” discount ensures discounts up to 20 percent with a B average. And if you complete driver’s education – there’s another discount! Another factor you may not have considered? An average of 13.7 percent of students go out of state for college. Dave Carpenter of USA Today says that for those leaving the nest, the resident student discount is a great way to save: “Premiums may be reduced by 10 percent to 20 percent if the student attends a college more than 100 miles away and doesn’t take a car.” Remember, lots of discounts doesn’t necessarily mean having the lowest premium – so shop around and make sure you’re finding a good deal that won’t break the bank. One final thing to keep in mind? Where your school is located also affects your insurance rates! The National Association of Insurance Commissioners found Washington D.C. as the most expensive, and North Dakota as the least expensive. Rurals schools will also have more inexpensive rates than urban campuses. (The insurance companies know more traffic means more possibility for pricey accidents.)

Got a ton of new college pals? Consider carpooling with them.Share on Twitter

Bonus Saving Hacks

So you’ve got our car; your insurance is locked and loaded. But let’s be honest: You’re still a cash-strapped college student. What are some other ways to save on campus-related transportation costs? First off, remember that many campuses are built with walking in mind. (To those of you moaning a little bit: You’ve heard the statistics about how bad sitting is for you in large doses, right?) Design your course schedule with walking in mind, and reap health and pocketbook benefits alike. Got a ton of new friends from a sorority or dorm? Consider carpooling whenever possible. And don’t forget to look into your city’s public transportation options. Chances are they’re more robust than you assume. Finally, consider moving as close as possible to campus: University parking permits can cause a serious dent in your wallet.

Today’s Homework

As you settle into your semester, make sure that all things insurance are taken care of so you can set your eyes on the full-time job that is school. It can be tricky to navigate the world of insurance as a young person. Ask questions, shop around, and find what works for you. Any tips we forgot to include? We’re handing out extra credit for comments below.

Got a question about car insurance? Click to ask a licensed insurance agent your questions → HomeAdvice


It’s never easy for young drivers to find cheap car insurance quotes. Adding a child to your policy can double your rate, according to the Insurance Information Institute, and having young drivers get their own insurance is often more expensive. Factoring insurance bills into college students’ tuition payments can add insult to injury.

However, most providers offer opportunities for college students and their families to save money on auto insurance. Some discounts apply to high school students as well. Each of these four insurers couples student-friendly discounts with excellent customer satisfaction ratings from J.D. Power and Associates.

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American Family

American Family is one of America’s largest auto insurance companies, with low rates in many markets. It maintains great customer service ratings and similar college-student discounts to competitors, including price breaks for good grades and going away to school without a car.

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A smaller insurer, Amica Mutual has a long track record of satisfied customers, as well as the typical college student discounts. The company also offers roadside assistance and free help for drivers who lose their keys, which could be an asset if your child misplaces them while at school.

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State Farm

College students can save up to 25% off their premium for good grades with State Farm. The insurer also has resources for young drivers and their parents on their site, as well as the Steer Clear drivers training program, which helps newly licensed drivers set and meet safety goals, like avoiding phone use. Though it’s aimed at new drivers, those who complete it and maintain a safe driving record can save up to 15%.

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USAA is consistently a top-rated insurance company that offers discounts for good grades and for completing an approved driver training course. If students attend school more than 100 miles from home and don’t take a car, they can get discounts to lower USAA’s already-reasonable prices. The only catch is students must qualify for USAA coverage, which is open only to current or former service members, Defense Department employees and their families.

Is switching worth it?

While each of these companies offers competitive discounts for college students, it may not be worth switching if you’re happy with your current auto insurer. Bundling policies leads to major discounts, and some companies also reward loyalty with cheap auto insurance premiums. In addition, you may have alumni or other affiliation discounts that apply to your policy and extend to your children.

Still, if you or your student prefers a separate policy, there are many good choices. Young drivers will still see higher rates than those with more experience, but comparison-shopping and research on discounts can make premium payments less painful.

Alice Holbrook is a staff writer covering insurance and investing for NerdWallet. Follow her on Google+.

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