How to Find the Right Car Insurance as a College Student

A young woman showing the car keys through the car window

Getting car insurance as a student can be expensive, but there are companies that offer discounts and other ways for college students to save on their monthly premiums.

As you shop around for insurance, determine the right level of coverage for your needs and budget, and consider other savings opportunities, you'll gain the peace of mind you need from auto insurance without breaking the bank.

How to Choose an Auto Insurance Company for College Students

Car insurance tends to cost more for younger drivers, including college students, because data shows that younger drivers are more likely than experienced drivers to file accident claims.

By shopping around, though, you'll have a better chance to find deals and discounts that can help you score a lower rate. Here are a few examples of insurers that provide discounts and favorable rates for college students:

  • Allstate: Students who are under 25 and unmarried can qualify for savings if they meet at least one of three requirements: maintain at least a B-minus grade point average, complete the insurer's teenSMART driver education program or attend school at least 100 miles away from where your car is garaged.
  • Geico: You may automatically qualify for a discount as a student. Plus, you can save with a B grade point average or better, or if you complete a driver's education course.
  • Liberty Mutual: If you live away from home and only drive your parents' vehicle occasionally, they can save on their policy if you're on it. You can also get a discount if you maintain a B grade point average or better.
  • Progressive: If you have a B grade point average or better, you can get a discount. You'll also save if you're in college full time, you're 22 or younger and you live more than 100 miles from home.
  • State Farm: Earn good grades to qualify for a discount with this insurer. You can also save if you live away from home to attend school and only drive when you're home.

Many factors go into determining your insurance rates, so no one insurance company is best for everyone. As such, it's crucial that you take the time to shop around and compare rates and discounts from multiple insurers to find the right fit for you.

How to Decide on the Auto Insurance Coverage You Need

There are many types of coverage you can get for your vehicle, some of which may be required by law. Here are some of the more common coverage types:

  • Liability coverage: If you cause an accident, this coverage pays for the injuries and property damage for the other party. Liability coverage is required in most states, and you may want to get more than the minimum to ensure you don't get sued if the damages cost more than your policy provides.
  • Collision coverage: If you get in an accident with another vehicle or an object, this will pay for the repairs or replacement of your vehicle.
  • Comprehensive coverage: If your vehicle sustains damage due to hail, fire, vandalism, theft or similar perils, this type of coverage will cover the costs to repair or replace the car.
  • Uninsured/underinsured motorist coverage: If you get in an accident and the other person is at fault, but they don't have auto insurance or their liability coverage is too low, this coverage will kick in and protect you. Depending on where you live, it may be optional or required by law.
  • Medical coverage: There are two types of medical coverage, which may be optional or required, depending on your state of residence. Medical payments coverage will pay for medical injuries and funeral expenses, while personal injury protection may cover those expenses plus lost wages, child care expenses, rehabilitation and more. Both offer protection, regardless of who caused the accident.
  • Other optional coverages: Depending on the insurer, you may also have the opportunity to buy rental car reimbursement coverage, which helps pay for a rental while your vehicle is in the shop for a covered claim. You may also opt to get emergency roadside assistance, rideshare coverage if you drive Uber or Lyft or other options.

Determining which types of coverage to get and how much insurance you need can be difficult. You'll need to consider your ability to both pay the monthly premium and cover the costs if you get in an accident.

Liability insurance is the best type of coverage to invest in because you could get sued by the other driver or their insurance company if you don't have enough of it. Also, if you or your parents wouldn't have the money to repair or replace your vehicle if you get in an accident, collision and comprehensive coverage may be worth it—it may also be required by your lender if you've financed the car.

That said, you could save on collision and comprehensive coverage by increasing your deductible, which is the amount you pay out of pocket if you file a claim. Just make sure you can afford the deductible amount.

If you're feeling overwhelmed trying to find the auto insurance policy that balances the right coverage amounts with your budget, consider speaking with an auto insurance agent. An agent will be more familiar with the insurer's offerings (including what can be done to reduce your bill amount) and can walk you through the process for your situation.

How to Save Money on Car Insurance When You're in College

In addition to shopping around and weighing different coverage types and amounts, here are some other ways you can save on your car insurance policy as a college student:

  • Stay on your parents' policy. Going off on your own with an insurance policy can cost you more than if you were to stay on your parents' policy and simply pay your share of the premium. To qualify, one of your parents must be listed on the vehicle's title, and your permanent address must be listed as their address.
  • Look for student discounts. Most auto insurers offer discounts specifically for college students. As you're shopping around, keep an eye out for savings opportunities through these discounts. You may also qualify for other discounts too.
  • Opt for pay-per-mile insurance. If you seldom drive your car, it may make more sense to pay by the mile instead of getting a traditional auto insurance policy. As you shop around, compare rates for both types of policy.
  • Drive responsibly. Over time, you may be able to qualify for discounts or reduced deductibles if you remain accident-free.

Work on Building Your Credit History

Another way to save on car insurance is to build a good credit history. In most states, car insurance companies use your credit history to create a credit-based insurance score, and the better your score, the higher your chances of saving on your insurance rates.

Apply for a student credit card, use it responsibly and monitor your credit regularly to start the process of building a positive credit history.