It’s never easy for younger drivers to find cheap car insurance. Especially considering that as a group, students are statistically more likely to make a claim on their insurance than drivers who have been on the road longer.
Whether you’re a high school or university student, being young often means being viewed as a higher risk by insurance companies and thus getting stuck with higher premiums. Factoring in these costs to your undoubtedly steep tuition is like rubbing salt into the wound.
The good news is there are some things that can be done. This article is a guide to help students ease the strain on their ramen budget and ultimately find cheap auto insurance. Specifically touched are….
What Type of Insurance Do Students Typically Need?
Which Companies Offer the Best Rates to Students?
Tips for Saving Money on Your Policy
Let’s get started…
Table of Contents
What Type of Insurance Do Students Typically Need?
What type of insurance you need is going to be partially down to your specific needs and partially down to what the law says. Different states mandate different types of coverage. Here are a few examples.
- Auto liability insurance is mandatory in 49 states and the District of Columbia.
- Twenty-two jurisdictions require uninsured motorist coverage.
- Fourteen states require underinsured motorist coverage. [2]
Don’t get too bogged down in the details, though. Most likely what you’ll need is liability insurance and collision coverage (if you feel like protecting your vehicle). Another thing that may be worth considering is that many school campuses are a target for thieves, so theft coverage may be worth it as well.
Which Companies Offer the Best Rates to Students?
Unfortunately, there isn’t a singular answer to this question. The best rate is going to depend on your location, age, gender, financials and a bunch of other variables. That said, having trawled through the internet there are a few companies whose names seem to be mentioned repeatedly in terms of lowest rates.
-
- State Farm – Students can save up to 25% off on their premium for good grades (above a B average) with State Farm. They also offer special driver safety programs for students, and completing them can bring rates down further.
-
- Amica – has a sterling reputation for customer service and offer the normal student discounts. They also offer free roadside assistance as a nice perk for newer drivers.
-
- USAA – If students attend a school more than 100 miles from home and choose not to take a car, they can get discounts. Additionally, USAA has highly competitive rates for military personnel and the usual student markdowns.
In the quest for cheap student car insurance, these companies are worth checking out but don’t stop there. Rates can fluctuate and the best course of action is to thoroughly shop around and investigate for yourself.
Tips for Saving Money on Your Policy
There are many different ways a student can save money on insurance. The first thing to decide is whether to be added to a family policy or purchase their own. In most cases, the cheapest option is to be added to a family policy — bundling policies is a great strategy for lower costs.
Here are a few other methods of saving money.
-
- Many companies will offer discounts simply by being a student, but be sure to pursue the ‘good grade’ mark down (if your grades qualify of course). These savings can range as high as 25% off of your total premium. Also, ask your insurer if they offer any school-specific discounts sometimes these are offered by major universities.
- Take advantage of pay-per mile plans. If you (or your child) live on a university campus or your driving is limited to school and around your hometown on the weekends this type of policy will reward you for not driving much. Not all carriers offer it but it’s certainly worth checking.
- Shop around and ask friends or family for recommendations. You should get a minimum of three quotes before you pull the trigger and don’t be afraid to try your hand at a bit of negotiation. Insurance companies will often price match, so also be sure to mention other quotes you have obtained when speaking with insurance carriers
- If you (or your student) drives an old car consider skipping the collision coverage. This means that in the event of the accident you will probably just write the vehicle off, but it can save on premiums. Also, going with a higher deductible is another strategy to pull down the cost of a premium.
The Insurance Information Institute has a comprehensive list of tips for saving on premiums, a link can be found below.
Summary
Finding cheap insurance for a student is not impossible, but it is tougher than for an older driver. Young drivers will generally see higher rates, but comparison-shopping, knowing your coverage needs and researching discount strategies can make the premium payments be a bit less painful. Let’s review the basics.
- The average student needs liability coverage, uninsured motorist coverage (depending on state) and collision coverage if warranted.
- State Farm, Amica, and USAA (at least anecdotally) seem to offer the most student-friendly rates.
- To get cheaper insurance for students, be sure to check into the available student discounts, try a pay-by-the-mile plan, shop around and drop coverages or take on a high deductible.
Sources:
Auto Liability Laws
Insurance Information Institute
Want to know How Much Your Injury Claim is Worth? Get a free settlement estimate right now.
