May 15, 2019 12:00 PM PT

Best Car Insurance for College Students

Read more about Car Insurance

Car insurance is expensive, especially for young drivers. But you can find ways to save. Here are some of the best insurance companies for college students.

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Top Companies for College Students

Statistically, people under 25, including college students, get into the most car wrecks, which means they pay the highest premiums.

You can't change your age, but you can save money on car insurance. Below is a list of top insurance companies for college students.

For the cost comparison, we used a 20-year-old male college student living in a mid-size city in the Midwest. He drives a 2016 Ford Fusion. The following estimates do not factor in potential discounts for a sample policy with:

  • Liability limits of $100,000/$300,000/$100,000
  • $5,000 Medical Payments
  • $100/$300 Uninsured/Underinsured Bodily Injury
  • $25,000 Uninsured Motorists Property Damage

Insurance rates vary based on a variety of factors. Research online or speak with an agent to get an accurate quote for your needs and circumstance.

State Farm

State Farm is the largest auto insurance company in the United States. They offer competitive rates, though their discounts and rating tiers are usually designed for families with multiple vehicles.

This makes them a great option for young adults who plan to stay on their parents' policy. But if you are getting your own policy, State Farm might not be the cheapest option. They do, however, offer discounts like:

  • Good Student Discount: State Farm's rate break is higher than most companies at 25%.

  • Good Driver Discount: They offer a 10% discount for having a clean driving record over the last 3 years.

  • Defensive Driver Discount: State Farm's "Steer Clear Safe Driver Program" is a brief online course that offers a 15% discount upon successful completion.

  • Telematics: State Farm's "Drive Safe & Save" program can result in a 5% - 50% discount after 3 months of having your driving tracked. Most drivers will receive closer to the 5% mark, but this is still a worthwhile discount.

State Farm Annual Cost:

  • Liability-only = $2,111
  • Full Coverage = $4,539

GEICO

GEICO has an award-winning app and a great online platform that make it easy to manage your policy. They offer:

  • Good Student Discount: GEICO offers a 15% discount for students with at least a B average.

  • Good Driver Discount: If you have a clean driving record for the last 5 years, you can receive up to 26% off your premiums.

  • Organizational Discount: If you're planning on joining a fraternity, sorority, or other student organizations, GEICO offers up to an 8% discount. They've partnered with over 500 groups and organizations.

  • Seat Belt Discount: GEICO offers gives up to 15% off your Medical Payments or PIP premiums.

GEICO Annual Cost:

  • Liability-only = $1,534
  • Full Coverage = $3,322

Progressive

Progressive is another well-known brand that offers competitive rates for college students. They have a great mobile app and an easy-to-use online platform. The company also offers discounts for having paperless documents and automatic payments, as well as:

  • Good Student Discount: Students with a B average or better earn a discount when they provide a recent transcript.

  • Good Driver Discount: If you have a clean driving record for the last 3 years, Progressive offers up to 31% off.

  • Distant Student Discount: This discount applies to students on their parents' policy who attend college over 100 miles away from home.

  • Telematics: Progressive's telematics program, Snapshot, varies according to performance. But a 5% discount is guaranteed just for trying.

Progressive Annual Cost:

  • Liability-only = $1,640
  • Full Coverage = $3,212

Allstate

Allstate is a popular choice for college students. Their rates are usually competitive, whether you're staying on your parents' policy or getting your own insurance. They offer:

  • Good Student Discount: Allstate's discount for good grades is 9%, a little lower than the other companies on this list.

  • Resident Student Discount: If you're on your parents' policy AND are not taking a car with you to college, you could reduce your portion of the insurance bill by up to 35%.

Allstate Annual Cost:

  • Liability-only = $2,476
  • Full Coverage = $4,539

Esurance

A subsidiary of Allstate since 2011, Esurance was designed to target a younger demographic. It combines an easy-to-use website and app with competitive rates for younger drivers.

Esurance is in 43 states and offers more traditional discounts than online competitor Metromile. It also has:

  • Good Student Discount: Esurance offers up to a 10% for good students, which is a little lower than the other companies on this list.

  • Good Driver Discount: Earn 30% to 40% off your premiums for maintaining a clean driving record over the last 3 years.

  • Defensive Driver Discount: If you've taken an online defensive driver course, you can receive up to another 10% off your premiums.

  • Pay per Mile: Esurance offers a pay-per-mile policy that is very similar to Metromile's. You'll pay a low base cost then a few cents per mile after that. This can be a great option for those driving less than 10,000 miles/year.

Esurance Annual Cost:

  • Liability-only = $2,534
  • Full Coverage = $4,684

Liberty Mutual

Liberty Mutual offers incentives for college students staying on their parents' policy, including Accident Forgiveness. This will prevent a rate increase after your first accident.

The company also has:

  • Good Student Discount: Liberty Mutual offers a similar discount as the other companies.

  • Distant Student Discount: Similar to Allstate and Progressive, you could receive this discount if your college is over 100 miles away from home and you stay on your parents' policy.

  • Driver Training Discount: Complete an eligible Driver Training Program to receive this discount. The amount varies depending on the state.

  • Organizational Discount: You can earn a 10% discount for belonging to any of the 14,000+ alumni associations, employers, or professional associations.

Liberty Mutual Annual Cost:

  • Liability-only = $4,284
  • Full Coverage = $7,128

Other Companies to Consider

USAA
USAA offers many of the same discounts as other companies, but the real value lies in their low rates specifically for military members.

This is a great option if you or a parent have served in the military. USAA's rates are very competitive, so if you're able to stay on an existing policy, this is likely going to be your best bet.

Metromile
Founded in 2011, Metromile offers an innovative way of rating for auto insurance: pay-per-mile. It tracks your usage either through an app or a device. You pay only what you drive—usually between $0.03 and $0.10.

Metromile still offers full coverage and all the usual perks. But if you hardly drive your vehicle, this can potentially save you quite a bit of money.

The company is currently in seven states:

  • California
  • Illinois
  • New Jersey
  • Oregon
  • Pennsylvania
  • Virginia
  • Washington
You can join a wait list to be notified when they expand to your state.

Staying on Your Parent's Policy

As a young adult, your cheapest option is usually staying on your parents' policy, even if it bumps up their premiums. Why?

  1. Your parents don't fall under the "riskiest" category with insurers.

  2. They likely have better credit, which also matters when it comes to rates.

Your parents may also have things that make their insurance less expensive. These could include a multi-policy discount, having multiple vehicles on their policy, and having more years with a clean driving record.

But sticking with their insurance isn't always your best bet.

When to Stay on Your Parents' Policy:

  • If your car is titled solely in your parents' name.

  • If it's titled in both your name and your parents' name.

  • If the car is titled in just your name, but your permanent place of residence is still your parents' house.

In auto insurance, permanent residency for college students simply means that you still have ties to your parents' house. This could mean that you live there during breaks or still receive mail at that address. In other words, college is just a temporary residence—you have not fully moved out of your parents' house yet.

When to Buy Your Own Policy

  • If you have fully moved out of your parents' house AND the vehicle is titled in your name. This means that you live in your college town year round, get your mail there, and might only visit your parents once in a while.

Keep reading to learn the right amount of coverage to carry as a young driver.

Whatever your living situation, check with your insurance agent or company to fully determine the appropriate course of action. It's critical to be insured the right way. Otherwise, your claim risks being denied.

How Much Insurance Do You Need?

Every state requires a minimum amount of liability insurance. This is the coverage that will pay for any damages to other people for which you are responsible.

The amount of liability limits varies by state, but usually about:

  • $25,000 per person
  • $50,000 per accident
  • $25,000 in property damage

You should strongly consider purchasing HIGHER than state minimum liability limits. Your premiums will cost more, but it's worth the extra protection.

Getting limits of 50/100/50 ($50,000 per person /$100,000 per accident /$50,000 property damage) or even 100/300/100 might cost an extra $100 to $200 per year.

But a bad accident can easily cost over $100,000. If you don't carry enough liability, you'll have to pay for the remainder out-of-pocket.

Things to Consider When Insurance Shopping

Here are a few things to keep in mind when trying to find the best deal on car insurance.

  • Know the Numbers
    Get a quote with higher than the state minimum liability limits. And don't leave out Medical Payments/PIP.

  • Don't Forget Comp and Collision
    These coverages affect your own vehicle. You'll probably want them if you have a newer vehicle. Find a quote with at least a $500 deductible on both.

  • Be Consistent
    Keep each quote the same to effectively compare companies.

  • Add Accidents or Violations in the Last 3-5 Years
    Before a new policy is issued, the company will run your MVR (Motor Vehicle Record) and will find any unlisted accidents. To get an accurate quote, share this information upfront.

  • Take Your Time
    Explore the discounts that each company offers. Not all companies offer the same discounts, so it pays to slow down and decide which ones you're eligible for.

  • Include Any Financing
    If you have a loan on your vehicle, don't forget to add the financing company to your new policy.

  • Sign up for Telematics
    If your new company offers it, this can be an easy way to save extra money. More on these below.

Shopping for auto insurance doesn't have to be painful. Most companies' websites make it easy to get a quote in just a few minutes.

A Few Last Tips

Consider an Older Vehicle
Older vehicles are less expensive to insure than newer vehicles. You can also drop full coverage on it. Just having liability-only on your car could save you hundreds of dollars a year on your auto insurance.

If you must drive a newer vehicle and have full coverage, at least consider raising your deductibles to $1,000 or more to help save money on auto insurance.

Telematics
Many of the featured insurance companies offer telematics, which is a great way to reduce your premiums while in college.

Telematics is the technology that tracks certain aspects of your driving, like how fast you accelerate or decelerate, and how many overall miles you drive (it doesn't track speeding). You'll usually be tracked over a 90-day period.

Typically, you can get a 5% discount regardless of your performance. The actual amount of discount depends on the results of your 90-day driving period. Most drivers can expect to receive in the 10% to 20% range.

Bottom Line

Young drivers have a lot of options when it comes to car insurance. Make sure you're covered properly and take advantage of all possible discounts.

It's also important to take the time to be informed. You can discuss your situation with your insurance company and often speak with representatives online. It always pays to know what you need (and don't).

More from CreditDonkey:


Average Cost of Car Insurance


Why is My Car Insurance So High


Metromile Review

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