You might think you have your act together when it comes to student car insurance. College life is hectic and money is always short. To lighten the load, you did your homework to get the best possible rate. Or did you?
Sure, your GPA is great, but there are other factors too. Knowing them could allow you to shave dollars from your premium and keep precious cash in your pocket.
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Read on to learn what goes into determining your car insurance rates.
5 Factors That Influence Auto insurance Rates for College Students
Besides your age, gender, and grades, the biggest factor that influences student car insurance is whether you take your car to school. That is because where you keep your car and how much you drive it is one of the primary ways insurance companies determine how likely you are to get into an accident.
You will need to carefully evaluate where you live and how much you drive before you decide if you’ll drive your car to school. Here are some other things to consider:
1. Location. This could be a big one. If your school is in a more rural area, you will pay lower rates. Urban areas and big cities always carry higher insurance rates. The reason is relatively simple.
More cars on the road, more obstacles like pedestrians, and narrow through streets all mean there is a much greater potential for you to be involved in an accident. States like New York and New Jersey have the highest car insurance rates, whereas states like Idaho, Iowa, Wisconsin, and Maine are among the lowest (Bankrate.com).
There may be a bit of relief, though. If you happen to live within 3 miles of your school or job, you could qualify for a mileage discount.
2. Type of Car. Your sports car might look good on campus, but in the long run, the student car insurance rate could eat you alive. If you can, go for a larger vehicle. They are more substantial, usually made of steel, and much easier to repair.
They also carry lower premiums. It may seem like insurance companies pick and choose which models to charge higher premiums for, but the law and their reasoning are sound. Sports cars are always higher because they have a large claims history (drivers like to go fast and are often involved in wrecks), and they have a much higher chance of being stolen.
That is why driving a minivan may not be sexy, but is a great choice if you want a lower insurance rate. Also, newer cars like sedans and compacts give you better rates, since they require much less maintenance and have better safety features.
3. Credit History. Insurance companies will examine your credit history as a predictor of your likelihood of getting in an accident. A good credit rating could save you around $1,000 per year in premium costs. If you have a poor rating, expect a higher premium.
4. How Much Driving You Do. This one is cut-and-dried. If you can prove that you will be driving much less, then you could save a bit on your premium. To further compound the savings, try to stay on your parent's insurance plan if possible.
5. Driving Record. This is the most important factor by far. You are young and full of potential. You are also squarely in the high-risk category.
Even a speeding ticket will make your insurance rate skyrocket, simply because you are already in a category with a higher risk. Make sure your driving record is as clean as possible so you can get the best rate.
Finally, consider getting a huge break on your insurance by leaving your car at home. Doing so can save you thousands of dollars. The best way to accomplish this is by trying to remain on your parents’ insurance policy. Most insurance companies will allow you to stay on your parents’ policy if you:
- Are under 25 years old.
- Attend a college or university within 100 miles of your home.
- Attend a college or university more than 100 miles from home, but drive your vehicle only when you are home for school breaks.
The number of miles that you drive in a year also heavily influences how much you will pay for car insurance. If you keep your car at home rather than at school, you will drive less. If you must bring your car to school, use mass transit as much as possible, live on campus if you can, and consider carpooling where possible.
Restaurants and other entertainment options are not beyond the scope of possibility if you take advantage of public or mass transit. Besides, you are there to learn after all, right?
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What Discounts Are Available to College Students for Car Insurance?
As a student, you may be eligible for several discounts.
Resident Student Discount. This echoes what was mentioned previously. Choosing a school that is far away and only driving when you’re home on break is a dream come true for your insurance company. They will usually give you a nice break for this, since there's much less chance for you to be involved in an accident.
Early Signing Discount. This is something you can take advantage of, but it is time-sensitive. If you're shopping for new car insurance before your current policy has lapsed, there are insurers that will give you a discount for not procrastinating.
Multiple Policy Discount. If you need other types of insurance, consider using the same insurance company for them. For instance, if you need renters insurance, getting both your renters insurance and auto insurance policy from the same company will make you eligible for a discount.
Other discounts that college students might be eligible for include:
- Good student discount
- Safe driver discount
- Pay-in-full or automatic payment discount
- Driving school discount
- Anti-theft discount
- Safety equipment discount
- Data tracking discount
Ask an independent insurance agent about these discounts when you shop for your policy.
What Car Insurance Coverage Is Necessary for Students Away at College?
Even for students away from home, good car insurance is a necessity. While you’ll want to buy the most affordable student car insurance available, you shouldn’t limit your coverage to your state’s bare minimums.
This could leave you at risk if an accident occurs with one of the nearly 13% of uninsured motorist roaming the roads. In some states, that's as high as 25%, according to the Insurance Research Council.
Remember, you can be the most responsible driver to ever hit the road, but that still won’t protect you from the actions of those around you. According to 2014 statistics from the National Highway Transportation Safety Administration, 33% of drivers 21 to 24 years old were involved in fatal alcohol-related accidents.
This is the highest of any age group. Furthermore, consider the fact that 18% of all college-age drivers report driving under the influence at some point in time, while just over 37% of young adults between the ages of 18 and 25 were reported to be binge drinkers, according to the Substance Abuse and Mental Health Services Administration.
The bottom line: Just because you might be responsible doesn't mean everyone else is. At the very least, you must carry your state’s mandated minimum liability coverage. But is that enough? Not likely.
To ensure you are protected, auto insurance for college students should include the following types of coverage with appropriate coverage limits:
- Collision coverage is protection for physical damage to your vehicle when it hits or is hit by another vehicle or object, such as a tree.
- Comprehensive coverage pays for losses from almost all other types of damage to your vehicle other than that resulting from a collision, such as theft, fire, vandalism, weather, birds or animals, glass breakage, and so on.
- Medical payments coverage, or personal injury protection, helps pay for medical, dental and funeral expenses for you or your passengers, regardless of who is at fault.
- Uninsured motorist coverage protects you if you are in an accident involving a hit-and-run driver or a driver who does not have auto liability coverage. It takes the place of liability insurance that the other driver should have, but does not.
- Underinsured motorist coverage protects you if another motorist is at fault for a collision but does not have enough insurance to cover your losses.
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How Do College Students Find the Best Car Insurance Rates?
The best car insurance for you as a college student will provide protection not only for liability risks, but also for injuries, collisions and other types of risks to you and your vehicle. And it will provide all of those things at a price that that isn’t burdensome.
First, find an agent that you are comfortable with. Your agent should be able to find quotes from numerous reputable insurance companies so that you can find the combination of coverage and price that best suits your needs and budget.
When comparing quotes, make sure that the coverage and limits are the same for each quote. It doesn’t pay to compare apples to oranges.
A local independent insurance agent can help you find the student car insurance you need, and will help you save money by finding all of the discounts that you are eligible for. This will help you keep cash in your pocket. Whether you spend it on tacos is up to you.