Car Insurance for College Students

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In the wake of the coronavirus outbreak, 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, car insurance for college students hasn’t changed. 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 your child goes away to school and takes a vehicle that you own to campus, keeping them on your household car insurance policy is typically the best arrangement. 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. Since 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, let your insurer know. If the student will be driving out of state, your policy may need to be adjusted.

Auto insurance requirements vary from state to state. For instance, if you live in Florida, where the state minimum liability limit is $10,000, and your student attends school in Texas where the limit is $30,000, your policy won’t meet the requirement.

You don’t need to notify your auto insurer when your college student makes short trips home for breaks or between semesters, just when they move to a new location for most of the year.

Another consideration is how your child plans to use a vehicle at college. If they have a job, such as delivering pizza or groceries, make sure it’s covered for commercial use. Some auto policies won’t cover claims for accidents that happen while driving for any business purpose other than commuting to work.

Should a college student drive someone else’s car?

Collision and comprehensive car insurance coverage follows the car, not the driver. When you lend someone your car, you’re also giving them insurance to cover any damage they cause.

If your student drives someone else’s car that turns out to be uninsured or underinsured, getting into an accident could mean trouble. Even if your student doesn’t take a vehicle to school, consider getting him or her a non-owner auto policy. That would protect you if your child borrows a friend’s car or gets into an accident as a passenger, and the car owner’s policy falls short.

Likewise, someone drives your college student’s car and causes a serious accident, your insurance would pay up to your coverage limits, and then the injured party would turn to the driver’s insurance for the rest. But if the driver doesn’t have insurance, you could be fully responsible as the car’s owner.

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 can be applied to college students’ car insurance policies. Here are three car insurance providers that offer especially attractive discounts for college students.

GEICO

Geico’s average annual cost for full coverage car insurance for 18-year-olds is $3,891. College students can also apply a number of 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 — can pay $351 less per year on Geico car insurance.

Full Coverage Distant Student Discount rate Good student discount rate Both discount rates
Cost $3,891 $3,890 $3,524 $3,540

Allstate

Allstate’s average cost for full coverage car insurance is $5,994 a year, for 18-year-olds on their own policy. Although this is a steep price, college students can apply a number of 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 are also eligible for a good and distant student discount.

The chart below indicates that, on average, college students around the age of 18 can save $712 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 $5,944 $5,635 $5,457 $5,232

Progressive

Progressive’s average annual cost for full coverage car insurance is on the higher end for 18-year-olds, at $6,022 a year. 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.

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

Full Coverage Distant Student Discount rate Good student discount rate Both discount rates
Cost $6,022 $6,085 $5,956 $5,978

State Farm

Students with State Farm pay an average annual cost for full coverage car insurance of $4,565 a year. To mitigate costs, State Farm offers up to 25% in annual savings for 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 are also eligible for a distant student discount, which can bring down costs as well.

With the good student and distant student discount rates applied, 18-year-old drivers save up to $1,729 annually on State Farm car insurance, which is significant compared to other providers.

Full Coverage Distant Student Discount rate Good student discount rate Both discount rates
Cost $4,565 $3,110 $3,908 $2,836

How can college students save money on car insurance?

Since car insurance rates are higher for younger drivers, finding ways to save money is critical. To find cheap car insurance for college students, it is best to shop and compare rates.

Students and their families need 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 you should compare multiple insurers to find the best car insurance for college students.

Getting every discount that you’re eligible for can add up to hundreds of dollars in 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 applies to drivers in high school, college and graduate school, up to age 25.
  2. Remaining accident-free. If you’re a safe driver and haven’t 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 can 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’re 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 doesn’t have their own (or a parent’s) vehicle on campus. The fact that a student should 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 likely qualify for a car insurance discount. If you’re 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 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.

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. But if they move out of student housing, they’re 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.

Renter’s 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, your college student typically needs to be covered by life insurance. If they die without coverage, you would be entirely responsible for paying the full amount of their outstanding student loans.

The bottom line

Auto insurers evaluate you differently and offer different discounts. In other words, no two policy quotes will be the same. The best way parents and college students can save money is to understand how insurers evaluate them and compare multiple quotes.

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. In order to find the best car insurance company for yourself, it’s important to understand your circumstances, needs, state requirements and what you’re looking for in car insurance. The best way to find the best car insurance company is to research and compare quotes from multiple providers.

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

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 2018 Honda Accord, 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.