Car Insurance for College Students

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In the wake of the coronavirus pandemic, the college experience has changed — perhaps permanently. Students face a future with a hybrid of on-campus and online courses. But no matter where they take classes, college students are still likely to have the same car insurance needs. If you’re a student who drives your own or a parent’s vehicle, you need adequate auto insurance to stay safe.

Should parents or college students purchase car insurance?

If a child goes away to school and takes a vehicle the parent owns to campus, keeping them on the household car insurance policy is typically the best arrangement if the insurance provider has that option. Likewise, if a parent and a student jointly own a car, the college student may be required to stay on the family insurance policy.

However, if a college student owns their vehicle, they typically must have auto insurance in their name, and parents may require this as well. Because younger drivers pay higher rates and don’t qualify for as many discounts as older drivers, college students who are on their own policies may pay higher premiums for the same insurance.

What do parents need to know about insuring a college student?

If you want to maintain car insurance for a college student if they bring a car to college, you generally do not need to let your insurer know. If your student drives in another state with different liability limits, your car insurance will still cover the car to those limits.

If your student does not take a car with them to college, you could ask your insurer to see if you are eligible for a distant student discount. That way, they can drive when they visit for weekends and holidays but you may be able to get a lower rate.

Note that if your student will not drive at college, it is likely still be a good idea to keep them on your policy. If they are uninsured, that lapse of coverage may result in higher rates when they are ready to drive later. If you take your student off your policy and they do not have their own, they will not be able to drive the family vehicles if they visit.

Something else to look at is your child’s job. If they are working for a position that requires extensive driving — such as delivering groceries for Instacart or driving for Uber — you may need to adjust your policy. Talk to your insurance agent to see about the best way to handle this to ensure they will be covered if they have an accident while working.

Should a college student drive someone else’s car?

When you purchase car insurance, you are getting insurance for the vehicle, not the driver.

If your student drives someone else’s car, the owner of the vehicle would be responsible for having car insurance and paying for any costs involved. Likewise, if someone drives your college student’s car and causes damages, your insurance would pay up to your coverage limits. As the car’s owner, it is your responsibility and insurance that applies.

The best car insurance for college students

While many of the best car insurance companies provide discounts to college students, some are more generous than others. Most insurance companies also offer good student discounts that may be applied to college students’ car insurance policies. It is also common to find a discount for students who are going to college more than 100 miles away from their home, and will not have a car on campus. Since insurers can assume they will not be driving as much as they would at home, the discount helps to offer a slightly lower rate in this circumstance. Here are five car insurance providers that offer especially attractive discounts for college students.

Allstate

Allstate’s average annual cost for full coverage car insurance is $2,202 a year for 18-year-olds on their own policy. Although this is a steep price, college students may be able to apply discounts to bring down the cost of Allstate’s auto insurance. Allstate offers a Smart Student discount and teenSmart driver education program for additional savings. College students who can maintain a GPA of at least 3.0 and/or are attending school at least 100 miles from their primary residence may also be eligible for a good and distant student discount.

The chart below indicates that, on average, college students around the age of 18 can save $402 a year with Allstate by applying both the good student and distant student discount.

Full coverage Distant student discount rate Good student discount rate Both discount rates
Cost $2,202 $2,179 $1,810 $1,800

Farmers

Students who have a policy with Farmers pay an average of $2,118 for their insurance each year. Maintaining good grades or appearing on the Dean’s List or Honor Roll may result in savings, and so might attending college more than 100 miles from home without a vehicle. Farmers also has a youthful driver discount for anyone under 25 who is a child or grandchild of a policyholder.

By taking advantage of the distant student and good student discounts, an 18-year-old driver may save an average of $400 on their premium cost.

Full coverage Distant student discount rate Good student discount rate Both discount rates
Cost $2,118 $2,068 $1,786 $1,718

GEICO

Geico’s average annual cost for full coverage car insurance for 18-year-olds is $1,519. College students may also be able to get discounts to bring down the cost of the policy. Geico offers discounts for membership in several organizations, as well as good student and distant student discounts.

The chart below shows that on average, college students at the age of 18 — who apply both the good and distant student discount rates — pay $250 less per year on average with Geico car insurance.

Full coverage Distant student discount rate Good student discount rate Both discount rates
Cost $1,519 $1,501 $1,269 $1,269

Progressive

Progressive’s average annual cost for full coverage car insurance for 18-year-olds is $1,727. In addition to the standard good student and distant student discounts, Progressive also offers a usage-based car insurance discount for infrequent drivers. Eligibility for the good student discount requires a GPA of at least 3.0. To qualify for the distant student discount, college drivers must be attending school at least 100 miles from their primary residence, be 22 years of age or younger, and not have a vehicle with them at school.

Based on applying both discounts, 18-year-old drivers may pay $213 $44 less annually on Progressive car insurance.

Full coverage Distant student discount rate Good student discount rate Both discount rates
Cost $1,727 $1,692 $1,514 $1,514

State Farm

Students with State Farm pay an average annual cost for full coverage car insurance of $1,615 a year. To mitigate costs, State Farm offers up to 25% in annual savings for eligible college students who can maintain a GPA of at least 3.0. Students who are attending school at least 100 miles from their primary residence without a car may be eligible for a distant student discount.

With the good student and distant student discount rates applied, 18-year-old drivers save an average of $428 annually on State Farm car insurance.

Full coverage Distant student discount rate Good student discount rate Both discount rates
Cost $1,615 $1,626 $1,187 $1,187

How can college students save money on car insurance?

Because car insurance rates are higher for younger drivers, finding ways to save money can be critical for some individuals. To find cheap car insurance for college students, getting several quotes can give you an idea of what you will pay.

Students and their families may want to be aware of potential discounts and ask insurers if they qualify. Not all carriers charge the same base rates or offer the same discounts, so it often helps to compare multiple insurers to find the best car insurance for college students.

Getting every discount that you are eligible for can add up to significant savings. Here are nine car insurance discounts that college students might qualify for:

  1. Maintaining good grades. Some insurers reward students for doing well in school. For instance, an insurer might cut a college student’s rate if their report card consistently shows at least a B average or a 3.0 GPA. This discount may apply to drivers in high school, college and graduate school, up to age 25.
  2. Remaining accident-free. If you are a safe driver and have not been in an accident for a period, such as three years, a car insurer might reduce your premium.
  3. Having multiple policies. When college students or parents bundle different types of insurance (such as auto and home or renters) with the same carrier, they may pay less.
  4. Belonging to an organization. Are you affiliated with a fraternity, sorority, honor society or other membership organization? If so, you might qualify for a car insurance discount.
  5. Enrolling at a particular college or university. Some institutions partner with insurers, making you eligible for insurance discounts while you are a student.
  6. Attending a far-away school. Many car insurers offer a discount if a college student goes to school at least 100 miles from their primary home and does not have their own (or a parent’s) vehicle on campus. The fact that a student will likely be driving less frequently gets factored into your rate.
  7. Completing a safe driver program. Many car insurers offer discounts for a period after you complete an in-person or online drivers education course. For example, Allstate offers a teenSmart Driver’s education program that allows students to take a driver’s education course for additional savings.
  8. Being in the military. Are you an active-duty or reserve member of the military? If so, you may qualify for a car insurance discount. If you are closely related to someone who has served in the military, some insurance companies may give you the military discount as well.
  9. Enrolling in a pay-as-you-drive program. Many insurers use technology to monitor how safe you are behind the wheel. Every program is different, but they all collect data—such as how fast you drive, when you drive, how hard you brake and your mileage—to evaluate you. If you stay within safe ranges set by the insurer, you may get a reduced rate.

Other insurance college students may need

In addition to having the right types and amounts of car insurance, college students may need other coverage to protect themselves and their families.

Health insurance

Most college students have several options for health insurance, including:

  • Staying on a parent’s plan until age 26
  • Getting a plan through your school
  • Getting a policy through an employer
  • Purchasing a plan on the federal or state insurance marketplace
  • Shopping through a broker or an online insurance comparison site.

You will not likely be able to bundle your car insurance with health insurance for extra savings like you can with some other policies, but both types of insurance can protect your finances.

Renters insurance

If your student lives on campus in a dormitory, your home or renters insurance typically covers their belongings against theft, fire or storm damage. If they move out of student housing, they are no longer covered under your home or renter’s policy and need their own policy.

Getting renters insurance for your off-campus college student may cost as little as $15 to $20 per month. It would help pay to repair or replace damaged or stolen items, such as computers, phones, furniture, bikes, musical instruments and clothes.

Renters insurance also gives your college student liability coverage if a visitor gets hurt at their place. It also provides funds for living expenses if a student’s off-campus apartment or rental home becomes uninhabitable while repairs are made after a natural disaster, such as a fire or windstorm.

Life insurance

If you co-signed student loans, you may want to have your college student covered by life insurance to cover those loans if they pass away. One option is a term life insurance policy for them, which is usually inexpensive and only stays in effect for a certain number of years. Once your student is financially independent, they can decide if they want to purchase more extensive coverage themselves. If you want to have a life insurance policy for your adult child, you will need their consent.

The bottom line

Auto insurers evaluate you differently and offer different discounts. In other words, no two policy quotes will be the same. Parents and college students may save money when they understand how insurers evaluate them and can compare multiple quotes and look at potential discounts.

You and your college student may need other insurance policies depending on where you live, the cars you drive and your financial situation. Consider all the risks carefully and use insurance to protect your potential financial losses while your student is in college.

Frequently asked questions

What is the best car insurance company?

Each car insurance company has different coverage options, discounts, claims processes and state requirements to consider when comparing quotes and providers. To find the best car insurance company, consider your circumstances, needs, state requirements and what you are looking for in car insurance.

The top 2020 best car insurance companies, determined based on J.D. Power scores, financial strength, and customer satisfaction, may be a good place to start.

What factors will decrease the premium costs for young drivers?

Several factors go into your premium costs. Discounts may significantly reduce costs for young drivers. In general, your cost will decline as you age. So, for example, you will probably pay more as an 18-year-old than you will when you are 28, although factors like where you live and poor driving history will have an influence too.

What is the average cost of auto insurance?

The average cost of minimum coverage in the U.S. is $565 annually, and for full coverage is $1,674 annually. Younger drivers, however, pay significantly more. For an 18-year-old, the average annual cost for minimum coverage is $1,965, while full coverage is $5,385.

Methodology

Bankrate utilizes Quadrant Information Services to analyze rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 18-year-old male and female driver with a cleaning driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our sample drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should be used for comparative purposes only. Your quotes may be different.

Rates are based on 2021 data from Quadrant Information Services.

Written by
Grace Kim
Insurance Contributor
Grace Kim has two years of experience in writing for finance and insurance domains such as The Cheapest Car Insurance Companies in New Jersey at Bankrate and Reviews.com. She has written about auto, homeowners, renters and life insurance. She holds an M.Sc from New York University in Corporate Communications and has spent most of her professional experience writing about finance and tech topics.