Best Car Insurance for College Students

Car insurance for young adults is notoriously pricey, and if you or your child are taking out loans, you’ll want to save money any way you can. Keep reading to learn about student car insurance coverage options, the most affordable car insurance for college students, and how to find the best car insurance plan for college students.

The best auto insurance for college students will provide various coverage options, discounts, and benefits for low premiums. Many auto insurance providers offer discounted car insurance for students with good grades or training programs that, when completed, will tack on extra discounts to your policy.

However, the most affordable car insurance may not always be the best coverage option.

When sifting through auto insurance policies, you will find two coverage options: liability coverage and full coverage.

The critical difference between liability coverage and full coverage is who is covered in an at-fault accident. With liability coverage, only the other party in an at-fault accident is covered by the at-fault driver. With full coverage, the at-fault party and the other party are covered by the at-fault person.

While liability coverage, the lowest coverage option permitted by federal law, may save you some money on premiums, it only takes one at-fault accident to put you on the hook for costly repairs and medical expenses. Liability coverage is generally less expensive than full coverage because it provides less protection.

In most cases, the best car insurance for students will be a policy with full coverage and the lowest premiums. Students who live at the same permanent address as their parents or legal guardians may want to join their policy, as this will be the least expensive way to get coverage. Full coverage offers a more comprehensive policy with more coverage options than liability coverage.

Liability coverage is the best insurance for students who want the lowest, most affordable premiums. Liability coverage is the minimum amount of auto insurance you can have, by federal law, in the United States without being underinsured. Suppose you are at fault in an auto accident. In that case, liability coverage helps to pay for repairs to the victim’s vehicle and medical expenses the driver or their passengers may sustain.

Policyholders can decide how much coverage they want within their plan. If you want to keep your premiums low, you can choose to insure yourself with the minimum coverage required in your state. It’s important to remember that each state’s minimums differ quite substantially. Just don’t be surprised if you have to pay twice the amount of your student loans if you are found liable for an auto accident.

While liability coverage may not be the best car insurance, it is certainly the most affordable coverage option. The average liability insurance cost is about $650 annually or about $54 monthly. However, this average varies by provider, state, and the age of the insured.

Full coverage auto insurance offers the same benefits as liability coverage and then some. Full coverage not only helps to pay the vehicular repairs and medical expenses of the other party in an at-fault accident, but it also helps to pay the repairs on your vehicle and any medical expenses you or your passengers may face.

While full coverage is generally more costly than liability coverage, that doesn’t mean it covers everything, nor does it cost astronomically more than liability coverage. Full coverage policies still have minimums and maximums, so you can choose a full coverage policy with minimal coverage to keep your premiums down but your coverage more substantial.

All things considered, full coverage is generally the best car insurance coverage for college students. Full coverage can be tailored to your financial needs while providing a more extensive range of coverage options than liability.

The cost of car insurance for college students is not calculated differently than for other drivers on the road. Car insurance providers consider your age, gender, the type of car you drive, where you live, how often you drive, and several other factors to calculate your quote. Generally, car insurance for students is more expensive because you haven’t been driving long enough to build a good driving record.

Money is inevitably on your mind when you or your child are heading off to college. With the added costs of tuition, housing, books, meal cards, and everything else you need at college, you may want to cut spending on other things, like car insurance. On average, college students in the United States with their own policy spend about $1,250 annually or $105 monthly.

Many auto insurance providers have coverage options and discounts that provide affordable car insurance for college students. For example, full-time students under 25 with an average GPA of 3.0 may be eligible for a good student discount, reducing students’ car insurance premiums by up to 15%, depending on your provider.

The cheapest will be a plan with minimal coverage, low premiums, and some discounts stacked on top. While full coverage might give you more peace of mind, liability coverage is the cheapest option. 

Some providers offer safe driving programs and discounts specifically designed for students. With a good driver discount, college students can see the benefits of maintaining a clean driving record before driving long enough to prove this to insurance providers.

In addition to safe driving and good student discounts, various providers offer other discounts specific to college students, like discounts for being a member of a fraternity or sorority, or an away discount if you do not drive while you are away at school. Be sure to ask your provider what types of discounts you qualify for.

When your child goes to college and is not driving a car at school, there are several things you can do to lower their coverage and the cost. Some of the most common things you can do are:

If your child is going away for college and will not be using their or your car for more than 25% of the year, you can change your student from a primary driver to an occasional driver. This switch may save you up to 20% of what you pay for your student’s car insurance annually.

The student away or distant student discount differs from the occasional driver discount in that a student away at school may still be the primary driver on the policy, but the provider recognizes there is no need to cover that student year-round. This discount may take up to 15% to 30% off your student’s car insurance premiums.

There are a few caveats to this discount. Depending on your provider, students must live 75 to 100+ miles away from their primary address. Your student must also be enrolled as a full-time student at their educational institution to qualify for this discount.

If your current provider does not have a student away discount, it may be beneficial to shop around for a new provider that does offer this discount.

Usage-based insurance (UBI) uses GPS tracking to collect and analyze data about how often you drive your vehicle. If your student is going away to college or is commuting to and from school without many extracurriculars, this coverage option may save you up to 15% on your premiums.

UBI is an excellent option for students who drive less than 10,000 miles a year, are safe and gentle drivers, and are okay with being tracked by a GPS device.

But be warned, some insurance companies may not only use your data for discounts. Some insurance providers may use your data to raise your premiums, so be sure to ask your provider questions when considering this coverage option.

Your final option is to drop them from your insurance plan. If this is the right option for you, financially or otherwise, we certainly don’t want to sway you. However, if your student plans on buying a car during or after college and will require insurance again, they may have difficulty finding a provider because of a lapse in coverage.

If your student returns from college during breaks from school and has a job or drives a car at home, be sure to update your policy so the student is covered when driving. Driving without any insurance is illegal in most states across the U.S.

If you are sure you want to drop your child from your policy when they are away from school, just remember they will not be covered if they are injured in an at-fault accident caused by a driver with liability insurance.

If your student is involved in an accident with an uninsured car or driver and they are no longer on your auto insurance policy, you will not have car insurance to cover their medical expenses. Make sure you contact your health insurance provider before taking your college student off your car insurance policy to ensure they will be covered in the event of a car accident without car insurance.

The best car insurance for college students away from home will depend on how far their primary address is from their school. If your student lives too close to home to be eligible for a distant student discount (providers usually set this range at 75 to 100+ miles away from the primary address), there are still ways you can lower your premiums on your college student’s car insurance.

If your student does not drive while away at school, it might be in your best interest to keep full coverage but opt for a usage-based insurance policy. This way, if your student is riding as a passenger with other students at school, they will still be covered in an accident because of the full coverage. 

The device used to determine usage-based insurance rates will collect data while your student’s car is and is not being driven. From there, it will provide your insurance provider with information about how often your student drives. Your insurance provider will then offer you a discount, in rare cases up to 50% off, but on average, between 10% to 15% off your annual premium.

The best car insurance for college students who are out-of-state relies on how far away from their permanent address the student attends college. If your student attends school 75 to 100+ miles (minimum decided by your provider) away from their permanent resident address, they are eligible for a distant student discount. This discount can deduct up to 20% off your annual premium.

Students who change their primary address to their out-of-state university address will have to change their insurance coverage.

If your student is not changing their primary address to their out-of-state university address and you decide to keep them on your policy, you will want to do some research on the required minimum amount of coverage they should have in the state in which they attend school.

For example, if your student’s primary address is in Michigan but they attend school in Indiana, they will have to increase their coverage because the state minimums for most protections are higher in Indiana than they are in Michigan. For example, the required minimum amount of bodily injury liability coverage in Michigan is $20,000 per person and $40,000 per accident, whereas the minimum in Indiana is $25,000 per person and $50,000 per accident.

If you’re looking to find the best student car insurance plans, contact Clovered. You can submit your information online through this form to get a quote. Then, one of our licensed agents will reach out to you to discuss which policy will be the best for you. You can call us at 833-255-4117 or send us an email at [email protected] any time with questions about car insurance plans for college students.