In the wake of the coronavirus outbreak, the college experience has changed — perhaps for good. 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.
What does car insurance cover?
Car insurance is a package of coverages that protect you against financial loss in three main ways:
- Liability protection pays if you get involved in a lawsuit and are found at fault. This insurance is mandatory in most states, but the minimum amount you must carry varies depending on where you live.
- Medical protection pays for injuries to you or your passengers due to an accident. It covers a variety of expenses, such as medical treatment, lost wages and funeral expenses. Many states require medical coverage called personal injury protection (PIP).
- Property protections are optional. They reimburse you for damage caused by you, others or Mother Nature. Comprehensive pays for damage that isn’t the result of an accident with another vehicle, such as storm damage or theft. Collision pays for damage due to an accident with another vehicle. Both comprehensive and collision come with a deductible amount you must pay for a claim.
There are additional optional coverages that most policies offer such as:
- Uninsured and underinsured motorist pays when you get into an accident with a driver who has too little or no auto insurance to cover your losses.
- Rental car reimbursement pays for you to drive a rental while covered repairs are made to your vehicle.
- Glass replacement repairs or replaces your vehicle’s cracked or broken windows without applying a deductible.
States and lenders have different requirements for the types and amounts of auto coverage you must purchase. Your premium depends on a variety of factors, including the make and model year of your vehicle, your annual mileage, driving record, age, gender, marital status and credit.
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 can stay on the family insurance policy.
However, if a college student owns their vehicle, they typically must have auto insurance in their name. Since younger drivers pay higher rates and don’t qualify for as many discounts as older drivers, college students who buy their 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.
How can college students save money on car insurance?
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:
- 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.
- 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.
- 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.
- 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.
- Enrolling at a particular college or university. Some institutions partner with insurers, making you eligible for insurance discounts while you’re a student.
- 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.
- Completing a safe driver program. Many car insurers offer discounts for a period after you complete an in-person or online drivers education course.
- 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.
- 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.
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. Here are three car insurance providers that offer especially attractive discounts for college students.
- Discount for membership in several organizations.
- Potential 26% discount for being accident-free for five years.
- Up to 15% good student discount, typically if you’re a full-time student under age 25 with at least a B average.
- Discount for completing a driver’s education course.
- Good student discount for maintaining at least a B average.
- Away-at-school discount if you leave your car at your primary residence while you’re living away from home and taking classes on campus.
- Good driver discount for being accident- and violation-free for a period.
- An overall discount of up to 30% for completing the RightTrack program, which promotes good driving behavior.
- Discount for being a member of thousands of partnership groups.
- Up to 25% in annual savings for being a good student. This offer varies from state to state but typically requires you to be a full-time student with a GPA of at least 3.0.
- Discount for maintaining an accident-free driving record.
- Discount for being a “distant student” who’s attending school at least 100 miles from their primary residence.
- Discount for those under age 25 who complete the company’s Steer Clear driver training program.
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.