Updated March 17, 2020

Best Car Insurance for College Students

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How much is the average car insurance for a college student? A lot. But there are ways to drive down the cost. Here are the best cheap insurance companies.

Best Car Insurance for College Students

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

While you can't change your age, you can save money on car insurance. Below is a list of the best car insurance for college students.

For cost comparison, we used a 20-year-old male college student living in a mid-size Midwest city. He drives a 2016 Ford Fusion. The premiums quoted are for a policy with the following coverages (no discounts applied):

  • $100,000/$300,000/$100,000 liability limits
  • $5,000 medical payments
  • $100,000/$300,000 uninsured/underinsured motorist bodily injury
  • $25,000 uninsured motorist property damage

Car insurance rates vary based on factors like age, gender, and zip code. Research online or speak with an agent to get an accurate quote for your circumstances.

Insurance CompanyAnnual Liability Premium
GEICO$1,534
Progressive$1,640
State Farm$2,111
Allstate$2,476
Esurance$2,534
Liberty Mutual$4,284

State Farm

State Farm is the largest auto insurance company in the United States. They have competitive rates, but their pricing and discounts cater to multi-car families.

This makes them a great option for college students who plan to stay on their family's policy. If you want your own policy, State Farm might not be the cheapest option.

But they do offer discounts like:

  • Good Student Discount: State Farm's price 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 program is a brief online course on safe driving. You'll get a 15% discount for completing it.

  • Safe Driving App: The Drive Safe & Save program can get you a 5%–50% discount after 3 months of having your driving tracked on their app. Most discounts will be closer to 5%, but any amount off your premium helps.

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 high school and college students with at least a B average.

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

  • Student Organization Discount: If you're in a fraternity, sorority, or other student organization, GEICO offers up to an 8% discount. They've partnered with over 500 groups.

  • Seat Belt Discount: Buckle up every time you drive for a discount of up to 15% off your medical payments or personal injury protection 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 gives discounts for going paperless and enrolling in automatic payments.

A few of their other discounts include:

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

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

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

  • Safe Driving App: The Snapshot program monitors your driving habits in exchange for discounts. They'll give you a 5% discount just for trying the program.

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' auto insurance policy or getting your own.

Their discounts include:

  • 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' insurance policy AND you're 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

Esurance, which is owned by Allstate, was designed to target a younger crowd. It combines an easy-to-use website and app with competitive rates for younger drivers.

Esurance is available in 43 states. They offer more traditional discounts than online competitor Metromile.

Discounts include:

  • Good Student Discount: Esurance offers up to 10% off for students who maintain a 3.0 GPA or higher.

  • 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 could get another 10% off your premiums.

  • Pay per Mile: Esurance offers a pay-per-mile policy that's 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 if you drive 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 prevents a rate increase after your first accident.

The insurance company also offers:

  • Good Student Discount: Like other companies, Liberty Mutual will give you a discount for having a B average or better.

  • Distant Student Discount: Similar to Allstate and Progressive, you qualify for this discount if you go to college over 100 miles from home and you stay on your family's insurance policy.

  • Driver Training Discount: Complete a defensive driving course to get this discount. The amount varies by state.

  • Student Organization Discount: Earn a 10% discount for belonging to one of more than 14,000 partnered alumni associations, employers, or professional associations.

Liberty Mutual Annual Cost:

  • Liability only = $4,284
  • Full coverage = $7,128

Other Insurance Companies to Consider

USAA
USAA offers discounts for safe driving, good grades, and more. But the real value lies in their low insurance 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. 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 to pay for auto insurance: pay-per-mile. It tracks your usage through an app or a device in your car. You pay only what you drive—usually between $0.03 and $0.10 per mile.

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

The company is currently in seven states:
  • Arizona
  • California
  • Illinois
  • New Jersey
  • Oregon
  • Pennsylvania
  • Virginia
  • Washington
You can join a waitlist to be notified when they expand to your state.

Should I Stay on My Parents' Policy?

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For college students, your cheapest option usually is 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 insurance rates.

Your parents could also have discounts for bundled insurance, a multi-car policy, or 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' Auto Insurance:

  • If your car is titled solely in a parent's name.

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

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

In auto insurance, permanent residency just 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 haven't fully moved out of your parents' house yet.

When to Buy Your Own Auto Insurance:

  • 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 all your mail there, and might only visit your parents once in a while.

Do college students need car insurance?
If you drive, you need car insurance. It's simple as that.

Most states require you to have car insurance if you have a registered vehicle—even if you don't plan on driving it.

But how much auto insurance do you really need? Keep reading to learn the right amount for college students.

How Much Car Insurance Do I Need?

Every state requires a minimum amount of liability insurance. This covers damages you cause to other people or their property.

The minimum liability limits vary by state, but they're usually about:

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

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

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 insurance, you'll have to pay the remainder out-of-pocket.

How to Shop for Car Insurance

When shopping for car insurance for college students, keep the following in mind:

Know Your Limits
Know your state's minimums are and try to get a higher amount. And don't forget medical payments and personal injury protection if you can afford it.

Consider Comprehensive and Collision Coverage
These will cover damages to your car. You'll want them if you have a newer vehicle. Find a quote with at least a $500 deductible on both.

Be Consistent
Use the same amounts when getting quotes from different car insurance companies. You'll be able to comparison shop more effectively.

Take Your Time
Explore the insurance 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.

Add Accidents or Violations from the Last 3-5 Years
Before a new policy is issued, car insurance companies will run your motor vehicle record and find any unlisted accidents. To get an accurate quote, share this information upfront.

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

Shopping for auto insurance doesn't have to be painful. You can get an online quote from most companies in minutes.

Tips to Save on Car Insurance

Consider an Older or Safer Vehicle
Going with a reliable, safe car can lower your premium. That means avoiding that fun (but risky) sports car you've been eyeing. Older cars are also generally less expensive to insure than brand-new cars.

Raise Your Deductible
You can lower your premium if you raise your deductible to $1,000 or more. Just be sure you can pay that amount if you get into an accident.

Get Usage-Based Insurance
All of our featured car insurance companies offer usage-based insurance (UBI), which is a great way to reduce your premiums while in college.

UBI tracks your driving habits through a mobile app or device in your car. They collect information like how hard you brake and how many miles you drive. You'll usually be tracked over a 90-day period.

Typically, you'll get a 5% discount just for opting into the program. Your total discount depends on the results of your 90-day driving period. Most drivers can expect to get 10% to 20% off.

Bottom Line

Young drivers have a lot of options when it comes to car insurance. Make sure you shop around and take advantage of all possible discounts.

Take time to discuss your situation with your auto insurance company. It always pays to know what coverages you need (and what you don't).

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

More from CreditDonkey:


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