Car Insurance for College Students
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Car insurance for college students is a steep expense added on to the fact that sending your children off to college can be stressful already. It’s bad enough that car insurance rates are highest for young people but when you’re already a broke college student, having car insurance seems like a luxury that many forego due to high insurance rates. And we’re not joking. Many car insurance companies offer discounts to students who don’t bring a vehicle to college and live more than 100 miles away from school.
The good part of having the leave-your-car-at-home discount is that you won’t have a lapse in coverage and will pay less. This is as long as you don’t use your car much, aside from holidays and summers. Another positive part of forgoing your car (but staying insured) is that your car insurance rate will drop sooner than if you lapsed coverage and picked it up later. Remember that inexperienced and young drivers are the most expensive to insure and you won’t be accumulating years if you cancel your insurance.
The following are ways that you can keep your car and make the lowest payments while you’re trying to focus on your studies. Our agents know how to find you the lowest rates around. Here are some tips:
Best Car Insurance for College Students: Distant College Student Discounts
Allstate offers discounts for parents of students who attend college away from home. The only stipulation is that the student attends a school that is at least 100 miles away from home (parents’ home). If you qualify, you can save up to 35% on auto insurance premiums. This may just be the best car insurance for college students!
Farmers have a Distant Student Discount, which offers a break for parents who have kids off at school far from home. That’s not the only discount Farmers offers. There’s also a good student discount, which can save you about 24% each year (that’s a lot!).
USAA offers a Resident Student Discount for students who attend a college that is 100 miles away from home. However, to be eligible you or a parent must be on active duty in the military, a veteran or a Department of Defense employee. If you or a parent falls into this category, you can also get an additional discount for having good grades.
American Family offers students who drive at least 3,000 miles a year a Teen Safe Driver discount. They also offer a range of other discounts that may apply, as the Young Volunteer discount for people under the age of 25 and who do at least 40 hours of volunteer work for a non-profit organization per year. There are plenty of causes on campus that could save you money!
Other Car Insurance Discounts for College Students
Liberty Mutual offers an alumni association discount and works with over 14,000 associations and employers so you may be eligible for a discount depending on where you’re attending a school or doing an internship. If you maintain good grades (3.0 GPA or better), you may qualify for a discount. For young drivers under the age of 21, Liberty Mutual also offers a Driver Training Discount if you complete a driver training program.
State Farm offers the Steer Clear Safe Driver Program, an online course that can bring you a savings of 15%. You can even take the course on a mobile app. In addition to that, you can save 25% by keeping your grades at a B average or higher.
Esurance is owned by Allstate but has a different offer for students: a 10% discount for meeting a 3.0 GPA minimum. To be eligible, you must be under 25 years old and attending a full-time high school, college or university. You can even get the discount extended for a year after you graduate! However, the discount only applies to liability, collision and medical payments coverages.
Cheap Auto Insurance for College Students
You can score an affordable auto insurance policy for your student drivers by piling on car insurance discounts. Cheap car insurance for college students sometimes means doing some digging. Explore your sorority or fraternity discounts (yes, for car insurance!). There are also honors society discounts as well. Contact your university administration office to find out what other types of discounts you may be eligible for (they will know about affiliate programs with each car insurance company). You can also speak with a trusted agent, who can shop car insurance quotes for you and compare the savings from each car insurance company.
Many car insurance companies offer good-student discounts and good-driver discounts. If you’re a college student on a parents' policy, it pays to ask about adding you, and possibly other family members (yes, aunts, uncles and cousins count). Some car insurers offer steep discounts for family plans, safety equipment (airbags, sensors, backup cameras, anti-theft systems, daytime running locks, anti-lock brake systems etc.) and more. You never know how you may save until you ask.
What About Pay Per Mile Insurance?
Auto insurance rates and discounts for college students are certainly less complicated. Most people don’t know what pay-as-you-go car insurance is. You basically only pay for the amount you drive. Not every car insurance company offers pay per mile car insurance, however, and it’s important to note that unlike telematics insurance, the driver is not judged on driving behavior, strictly miles.
Now you’re probably asking, “How does pay per mile car insurance work?” The driver uses an in-car device that tracks the number of miles you drive per month, which determines your rate. You’ll be charged a base rate plus a per-mile fee. Both factors are used to come up with your monthly payment. The base rate will take into consideration everything that regular car insurance does (credit, age, driving history and car type) but less so than your mileage.
Whatever it is you decide to buy, it's important to get matched with an insurance agent who will compare car insurance quotes for you to find the best prices and best coverage from the best car insurance companies fit for you.
Licensing, Registration, and Taxes
Unless you become a permanent resident, you do not need to re-register your car in your school state if it is registered in your home state. If you're still covered under your parents' policy, let your car insurance company know you're relocating. They may enable you to keep your current insurance as long as your car is registered at the policy's original address.
You may be required to obtain separate auto insurance in the state where your school is located if:
- The student is the legal owner of the vehicle and has their own insurance coverage
- The student is a year-round resident of the state
In either instance, we recommend that you contact your insurance carrier to see whether you need to renew your coverage to protect your car while you're at school, just to be safe.
It's recommended to keep your student driver active and listed on your insurance, whether or not they plan to drive while in college, because the student in case if:
- Are struck by a car while on foot, on a bike, or as a passenger in another person's vehicle
- Are compelled to drive due to an emergency
- Are struck by a car while on foot, on a bike, or as a passenger in another person's vehicle
Keep Your Student Driver On Your Policy If:
- They live at home and commute to school
- They attend a nearby school and return home on a regular basis
- They go to school away from home and you want to protect them in an emergency
- You want them to be completely protected if they are harmed as a passenger in a car accident.
- They are unable to pay for their own vehicle insurance.
Whether you're an 18-year-old college student, or an adult living with your parents, the regulations for car insurance remain the same. You can continue to share a car insurance policy regardless of your age if you share a permanent address or if the car is typically parked overnight at your parents' house.
Take Your Student Driver Off Your Policy If:
- If they'll be living on campus and not visiting home often
- If they aren’t bringing a vehicle to college
If your child is still on your insurance, you may be able to reduce their driving privileges from primary to occasional. The definition of an occasional driver varies based on your insurance provider, but in general, someone who drives less than 25% of the car's yearly miles is considered an occasional driver.
If your student is allowed to be excluded from the policy:
- Contact your insurance company ahead of time if your child plans to drive while visiting back home, such as during summer, spring, and winter vacation, to have them added back to the policy.
- Dissuade them from driving a friend's car while your student is away at school; the friend's insurance may or may not sufficiently cover other drivers in the event of an accident.
Advantages of Having a Car on Campus
An Easier Way to Commute
Having a car may make sense if you'll be commuting off campus for a job or internship on a regular basis, and is especially useful during grocery runs compared to lugging bags onto the bus. Driving can be safer than riding with strangers and it is frequently faster and a lot more flexible than taking public transportation.
A Fast Way Home
If you live within driving distance, owning a car allows you to return home more frequently and spontaneously without needing to plan for tickets, departure times, and etc.
Having a car on campus means freedom. You'll be able to explore your new area and leave campus on any whim. Having a car to do these things are especially useful if your institution doesn't provide much in the way of ridesharing or public transportation.
Disadvantages of Having a Car on Campus
FOMO: Fear of Missing Out
Having a car on campus allows you more freedom and opportunities to escape, but at the same time, you may miss out on taking long walks and exploring your surrounding area more in depth.
From personal experience, few individuals drive to college, but everyone needs a ride at some point, so be prepared to play chauffeur, delivery driver and designated driver.
If you're undecided about whether or not to drive to college, familiarize yourself with the location of your campus. Insurance companies examine the crime and traffic rates in your area when determining your insurance premiums. If your school is located in an area where both are prevalent, you may want to consider adding security or collision coverage to protect yourself in the case of theft or damage.
Also, though no one intends to drive while intoxicated, more than a third of American college students do so each year. Leaving your car at home is, of course, the most straightforward approach to prevent a DUI.
Ridesharing in College
Finding strategies to save money and live frugally may help you stretch your personal finance while reducing the stress of figuring out how to pay for things like food, rent, tuition, and auto insurance. Ridesharing or driving for food services is a common option for college students to make money. If your child intends to drive for Uber, Lyft, or other food delivery services, you should first check with your insurance company to ensure that your liability coverage is adequate to cover whatever the ride-sharing services' insurance policies do not. Your insurance may be able to provide you an extra rider, which will cost you extra but will ensure that you are insured.
Car Insurance for College International Students
Many international students require a car while in the United States. International students' car insurance operates in the same way as it does for everyone else in the United States.
The following standard kinds are available from most providers:
- Liability - protects other drivers in the event of an accident in which you are at fault by providing property and bodily injury coverage.
- Collision – protects you and your car in the event of an accident.
- Comprehensive coverage - protects your car from harm caused by something other than an accident (ex. vandalism, weather damage, etc.)
- Personal Injury Protection - pays for medical expenditures incurred by you and your passengers as a consequence of an accident.
- Uninsured/Underinsured Motorist Coverage – offers protection in the event that an uninsured driver and you are involved in an accident
Note: If your foreign license is converted to an International Driving Permit, most states will allow you to drive with it.
If foreign students plan to drive a car, some states require them to get a state driver's license, while others allow them to utilize a valid driver's license from their home country as long as they also have a valid International Driver's Permit. The International Driver's Permit is a document that allows you to drive internationally. This permit functions similarly to a driver's license and may be used to get auto insurance for overseas students. To apply for one, you must have had a valid driver's license for at least six months in your home country. The validity of an international driver's permit is one year and it can be renewed.
Renters Insurance for College Students
If students opt to live in on-campus housing, such as a dorm, their belongings should be protected by their parents' homes insurance coverage or they can purchase coverage through their school. If they reside off-campus, though, this isn't always the case. Therefore, renters insurance is required if your child is renting an apartment or a house. Property from theft, fire, and vandalism are all covered by renters insurance and if the rental property is damaged and untenable, the policy also pays the additional costs of living elsewhere up to the policy's "loss of use" maximum.
You might save money through a multi-policy discount by purchasing renters insurance via your current homeowners insurance carrier!
Before your child leaves for college, it can be a good idea to sit down with him or her and talk about the hazards of texting while driving, drinking and driving, and borrowing or lending automobiles. If your child uses a friend's car, he or she is dependent on that person's insurance, which is a high risk, betting on if they have sufficient coverage.
Be Prepared to Save!
Every parent understands that car insurance for college students can get expensive, but you can easy one of your worries by making sure you have adequate insurance when they go to school. This won’t stop younger drivers doing something reckless, but it can help protect yours and their personal finance in case of an accident. Careful research of your auto insurance rates, coverage, will help you determine the safest and most cost-effective option. If you decide to drive your car to college and want to be sure you're getting the best bargain on auto insurance, SmartFinancial can provide you with a quote, enter your zip code below!