November 27, 2019

Student Car Insurance


Car insurance for young drivers is expensive. But students can earn discounts that may help. Read on to find the best price—and coverages—for your needs.

Statistically, drivers aged 16 to 21 get in the most accidents, so they'll pay the most in car insurance. But high school and college students may be eligible for discounts that can lower their premiums.

So just how much will students pay for car insurance? Read on.

How much is auto insurance for students?

The national average for car insurance for students varies based on age and type of education.

  • High school students pay an average of $3,209/year.

  • 16-year-olds pay the highest at an average of $3,985/year.

  • College students pay about $2,560/year This number drops an average of $600 each for each grade they advance.

Students can save up to $3,000 a year as an added driver to their parents' auto insurance policy versus taking out their own policy. Read on to learn more.

Here are typical rates for college-aged drivers from several popular insurers:

Car Insurance ProviderAverage Annual Premium
GEICO$1,750
Esurance$3,756
State Farm$2,818
Progressive$1,710
Allstate$2,558

Insurance rates vary based on a variety of factors, not just age. Research online or speak with an agent to get an accurate quote for your needs and circumstance.

Is car insurance cheaper if you're a student?
Students pay the most for car insurance because of their age and lack of driving experience. But many auto insurers offer discounts exclusively for high school and college students. Read on to learn more.

Best Car Insurance Companies for Students

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People under 25, which includes most students, get into the most car wrecks, at least according to statistics. That's why young people pay the highest auto insurance premiums.

But some companies offer policies and discounts to lower costs. Read on for a list of top insurance companies for students.

What's the cheapest car insurance for students?
GEICO and Progressive offer the cheapest car insurance for students ages 16 to 21.

For high school students, GEICO offers the cheapest rates with an annual premium of $1,975. Progressive comes in second with an annual premium of $2,460.

For college students, Progressive is the cheapest with an annual premium of $1,710. GEICO is close behind with an annual premium of $1,750.

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
    15% for students with at least a B average.

  • Good Driver Discount
    26% off your premiums with a cleaning driving record for the last 5 years.

  • Organizational Discount
    8% discount for members of a fraternity, sorority, or other student organizations.

  • Seat Belt Discount
    15% off your Medical Payments or PIP premiums.

GEICO Annual Cost:

  • Liability Only = $1,534
  • Full Coverage = $3,322

Esurance

A subsidiary of Allstate, Esurance targets a younger demographic with an easy-to-use website and app and competitive rates for younger drivers.

Esurance is in 43 states and offers discounts like:

  • Good Student Discount
    Up to a 10% for good students.

  • Good Driver Discount
    Earn 30%–40% off premiums with a clean driving record over the last 3 years.

  • Defensive Driver Discount
    10% off your premiums if you've taken an online course.

  • Pay per Mile
    You'll pay a low base cost, then a few cents per mile. 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

State Farm

The largest auto insurance company in the U.S., State Farm's discounts and rating tiers are designed for families with multiple vehicles. This makes them a great option for young adults who plan to stay on their parents' policy.

They offer:

  • Good Student Discount
    25% off for good grades, one of the best deals in the industry.

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

  • Defensive Driver Discount
    15% off upon successful completion of their online "Steer Clear Safe Driver Program."

  • Telematics
    5%–50% discount after 3 months of having your driving tracked through their "Drive Safe & Save" program.

State Farm Annual Cost:

  • Liability Only = $2,111
  • Full Coverage = $4,539

Progressive

Another well-known company with competitive rates for students, Progressive has a great mobile app and an easy-to-use online platform. They offers discounts for paperless transactions and automatic payments, as well as:

  • Good Student Discount
    Available to students with a B average or better.

  • Good Driver Discount
    31% off with a clean driving record for the last 3 years.

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

  • Telematics
    A 5% minimum discount just for trying their telematics program, Snapshot.

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
    9% for good grades, a little lower than the other companies on this list.

  • Resident Student Discount
    Up to 35% off if you're on your parents' policy AND don't take a car to college.

Allstate Annual Cost:

  • Liability Only = $2,476
  • Full Coverage = $4,539

What Discounts Do Students Get on Car Insurance?

Here's a list of discounts geared specifically toward student drivers:

  • Good Grade Discount
    A GPA of 3.0 or higher in high school or college will usually qualify. Most companies will require a transcript or proof of good grades.

  • Resident Student Discount
    Attending a school more than 100 miles from home? Your parents may qualify for the resident student discount IF the car is titled in their name.

  • Bundling Discount
    If you're renting an apartment while away, you'll want to consider renters insurance to protect your belongings. Many companies offer a bundling discount if you combine auto and renters policies.

  • Defensive Driver Discount
    If you take an insurance company-approved course on defensive driving, you may qualify for this discount. Check with your insurance company for a list of approved courses.

  • Safety Monitoring Discount
    Some companies offer discounts if you install a safety monitoring device in your vehicle to record your driving. Others simply require you to download a safe driving app.

Contact your insurance company or agent to learn more about other discounts like full payment, auto-pay, paperless statement, and loyalty.

Getting Your Own Policy vs Staying on Your Parents

College students will pay much less by remaining on their parents' policy. But that's not always the best choice.

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.

    Typically you need your own insurance policy when you're living away from your parents' house and driving a car you own full time. Otherwise, your insurance provider may not cover a claim filed under your parents' insurance.

When to Stay on Your Parents' Policy

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

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

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.

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

How Much Car Insurance Do Students Need?

Every state requires a minimum amount of liability insurance (also called Bodily Injury Liability). 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 are usually around:

  • $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.

Here are 3 other types of coverage to consider:

  • Property Damage Liability
    This coverage pays to repair damages you cause to another person's vehicle or property (like a fence or building) if you are at fault for the accident.

    Many states require this coverage. It usually does not cover damage to your own vehicle—that comes from collision coverage.

  • Personal Injury Protection (PIP)
    Also called no-fault insurance, this coverage pays medical and rehab expenses accrued by you and passengers of the vehicle following the accident.

    It is required in 13 states. Unlike liability insurance for injuries, which pays for medical expenses people in other cars if you cause an accident, PIP covers your own expenses.

    Your health insurance or a medical payments insurance policy may offer similar coverage, but it's specifically meant for auto-related injuries.

  • Uninsured/Underinsured Motorist Coverage
    This coverage pays out if another driver causes an accident and doesn't have insurance or if they don't have enough liability coverage to cover you and your passengers' injuries or damages.

If you or your parents lease or finance a vehicle, the lender will usually require that you carry Collision and Comprehensive coverages as well.

Below is a chart of state minimum coverages for each of these four types of coverage.

StateMinimum BI Coverage (per person/per accident)Minimum Property Damage Liability Coverage
Alabama$25,000/$50,000$25,000
Alaska$50,000/$100,000$25,000
Arizona$15,000/$30,000$10,000
Arkansas$25,000/$50,000$25,000
California$15,000/$30,000$5,000
Colorado$25,000/$50,000$15,000
Connecticut$25,000/$50,000$25,000
Delaware$25,000/$50,000$10,000
Florida$0/0 (no state minimum requirement)$10,000
Georgia$25,000/$50,000$25,000
Hawaii$20,000/$40,000$10,000
Idaho$25,000/$50,000$15,000
Illinois$25,000/$50,000$20,000
Indiana$25,000/$50,000$25,000
Iowa$20,000/$40,000$15,000
Kansas$25,000/$50,000$10,000
Kentucky$25,000/$50,000$25,000
Louisiana$15,000/$30,000$25,000
Maine$50,000/$100,000$25,000
Maryland$30,000/$60,000$15,000
Massachusetts$20,000/$40,000$5,000
Michigan$20,000/$40,000$10,000
Minnesota$30,000/$60,000$10,000
Mississippi$25,000/$50,000$25,000
Missouri$25,000/$50,000$10,000
Montana$25,000/$50,000$20,000
Nebraska$25,000/$50,000$25,000
Nevada$25,000/$50,000$20,000
New Hampshire$25,000/$50,000$25,000
New Jersey$15,000/$30,000$5,000
New Mexico$25,000/$50,000$10,000
New York$25,000/$50,000$10,000
North Carolina$30,000/$60,000$25,000
North Dakota$25,000/$50,000$25,000
Ohio$25,000/$50,000$25,000
Oklahoma$25,000/$50,000$25,000
Oregon$25,000/$50,000$20,000
Pennsylvania$15,000/$30,000$5,000
Rhode Island$25,000/$50,000$25,000
South Carolina$25,000/$50,000$25,000
South Dakota$25,000/$50,000$25,000
Tennessee$25,000/$50,000$15,000
Texas$30,000/$60,000$25,000
Utah$25,000/$65,000$15,000
Vermont$25,000/$50,000$10,000
Virginia$25,000/$50,000$20,000
Washington$25,000/$50,000$10,000
West Virginia$25,000/$50,000$25,000
Wisconsin$25,000/$50,000$10,000
Wyoming$25,000/$50,000$20,000

What Is the Best Policy for Low Mileage Drivers?

If won't be driving your vehicle often while away at school, you'll still need to maintain coverage. Here are some options:

Non-Owner Auto Insurance
This is a type of auto liability insurance for people who drive but do not own a vehicle. Coverage is typically inexpensive (up to 15% cheaper than a standard policy).

Non-owner insurance is often purchased by people who drive, but do not personally own a vehicle. The coverage would kick in if you're in an accident and found to be at fault, just as a normal liability policy would.

Storage Coverage
If you're traveling abroad or taking an internship and leaving your car behind, you may consider storage coverage or storage protection. This coverage reduces your insurance to only comprehensive coverage, which protects your vehicle against theft, vandalism, and weather-related claims.

No one can use the vehicle during this period, but your premium can be reduced significantly. Not all insurance companies offer this option—check with yours before making any decisions.

Other Things to Consider

Is your school out-of-state?
Check with your insurance agent or company to understand if you can remain on your parents' policy or not. If your parents own the vehicle, you'll likely be able to stay covered by them. But you may need to increase coverage to meet the minimum required by the school's state.

Where will you park your car at school?
Will you be in a garage or parked on the street? If it's parked outside, you should consider comprehensive coverage, which can help repair or replace your vehicle if it's stolen or damaged by things like hail or vandalism.

Will you be driving to and from class?
If you're commuting, especially long distances, you may want to consider collision coverage. This can help pay for the repair of your vehicle if it's damaged in an accident with another vehicle or object, like a mailbox or pole.

Bottom Line

Young drivers will pay more for car insurance. But you also have a lot of options. Make sure you're covered properly and take advantage of all possible discounts.

Discuss your situation with your insurance company or speak with representatives online. It always pays to know what you need—and don't.

More from CreditDonkey:


How Much Does it Cost to Add a Teenager to Car Insurance


Average Car Insurance Rates by Age


Car Insurance for 18 Year Olds

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