Affordable Car Insurance for College Students
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Car insurance is one of those things that many people need, but few really understand. Lots of drivers don’t realize how many options they have when it comes to finding the right car insurance plan. If you’re trying to lower your monthly car insurance premium, there are certain actions you can take to help lower your overall cost.
However, there are also some factors that you don’t have much control over.
Unfortunately for young drivers, age is a major factor that insurance companies consider when calculating your monthly premium. Young adults, including most college students, struggle to find car insurance plans that don’t break the bank.
This guide will explain why it’s so hard to find affordable car insurance for college students and the best things you can do to lower your costs.
Do You Need Car Insurance?
Lots of young drivers are surprised when they get their first car and realize how much they’ll have to pay each month for their car insurance. With so many other financial concerns and typically limited (or non-existent) incomes, college students often ask, do I really need this?
The short answer is yes.
In most states, it’s the law. There are a couple of states in which car insurance is not strictly mandatory from a legal perspective, but it’s always a good idea to protect yourself and others.
Car Insurance Requirements by State
Just because a state doesn’t have mandatory car insurance laws doesn’t mean the responsible driver can avoid financial responsibility.
For example, in New Hampshire, drivers are not legally required to carry car insurance.[^1] That being said, New Hampshire drivers are still legally responsible for paying property damages and any associated medical costs if they were to cause an accident. Most people cover these expenses through car insurance, but New Hampshire drivers have the option to pay out-of-pocket if they neglect to purchase an auto insurance policy.
Virginia is another state in which car insurance is not legally required. Virginia drivers who don’t want to carry a car insurance policy have the option of paying a $500 fee to the Virginia DMV to drive uninsured.[^2] Much like in New Hampshire, these uninsured drivers are still financially liable for any at-fault accidents.
How Car Insurance Benefits You
Aside from a couple of states like New Hampshire and Virginia, most of the country has some minimum coverage amounts that all motorists need to drive legally. Even in a state without an insurance mandate, the best way for you to protect yourself from massive financial risk is to have car insurance.
If you’re deemed at-fault for an accident that damages someone else’s car or person, you may be surprised at how many expenses fall on you. These include but are not limited to:
Fines and legal fees
Mechanic fees or full car replacement
Replacing lost income if the injured party is unable to work
In addition to protecting you from these sudden costs, there are several other good reasons to maintain car insurance. Here are some of the most important ones:
Your leasing agent might require it – In many cases, you have to provide proof of car insurance before you can even drive a vehicle off the lot. If you plan to finance or lease your vehicle, it’s common for lenders and leasing agents to require several types of coverage to help protect their investment.
You can avoid costly repairs on your own car – You can purchase collision and comprehensive coverage that protects you and your car in the event of damage, regardless of whose fault it is. If your car is lost, stolen, or damaged by environmental forces or your own driving mishaps—like backing out of a tight spot or pulling up too close to the curb—you won’t have to use your own money to fix the problem.
You can protect yourself and your passengers – With medical coverage and personal injury protection, you can drive with the confidence that any injuries that occur to you or your passengers will be covered. Through your insurance, you can help pay for doctor visits, hospital bills, prescriptions, surgery, and more.
You can protect yourself from uninsured drivers – If you’re in an accident with another driver and they’re the one at fault, all of the processing goes through their insurance provider. But if they don’t have car insurance, you could have to deal with personal injury and vehicle repairs alone, through no fault of your own. To avoid this scenario, you can get uninsured motorist coverage.
Factors Affecting High Premiums for College Students
It’s no secret that insurance typically costs more for young drivers, but why is car insurance so expensive? To college students who are entering adult life and trying to make ends meet while also focusing on school, this can seem unfair.
However, college students’ hefty insurance premiums are determined by data and research. Here are the main reasons why insurance companies charge higher prices for college students:
College students have unproven records – Every driver’s insurance premium is partially based on their previous driving record. Because most college students haven’t been driving for very long, insurance companies don’t have a statistical record to accurately determine their risk. In that case, insurers often charge young drivers as if they have poor driving records until they can consistently prove otherwise.
College students are more likely to react poorly – Having minimal driving experience, young drivers often fail to react appropriately to driving hazards. One study shows that 75 percent of serious crashes by teen drivers are caused by critical errors such as failure to scan and respond to hazards, driving too fast for the road conditions, and other distracted behaviors.[^3] Insurance companies understand this increased risk and charge accordingly.
Distracted driving is more common among college students – Texting while driving is the most common distracted driving behavior, but others include chatting with others in the vehicle, applying makeup, digging for something in your purse or backpack, eating or drinking, and more. According to U.S. government data, 11 percent of fatal accidents with drivers under 20 involved distracted cell phone use.[^4]
Dangerous driving is more common among college students – Driving under the influence of drugs and alcohol is an extremely dangerous behavior that’s more common among younger drivers. Other reckless behaviors include excessive speeding, street racing, ignoring traffic signals, and of course, distracted driving.
As a college student, you may look at this list of reasons and see that none of them apply to you. Rightfully, you might think it’s seriously unfair to be judged by reckless drivers when you yourself are safe, responsible, and accident-free.
Unfortunately, insurance companies charge college students a higher auto insurance rate not because of their individual behavior, but as a result of statistical trends among college students all across the country. As you accumulate years of safe driving, you’ll eventually outgrow these younger driver premiums.
How to Lower Car Insurance Premiums as a College Student
Every driver wants to know how to lower car insurance premiums. For college students, it can be tricky, but not impossible. Here are a few ways to secure good car insurance for college students:
Keep a clean driving record – A great way for college students to keep their premiums down is by avoiding accidents and traffic tickets. A single mark on your driving record can stay with you for years and increase your premium by hundreds of dollars.
Earn a good student discount – Many companies offer car insurance discounts for college students who maintain good grades. Doing well in school can have immediate, real-world benefits.
Pay a distant student car insurance rate – If you leave your car at home during the school year, and attend school more than 100 miles away, you may be eligible for a distant student car insurance rate. This rate can substantially lower your monthly insurance costs.
Get a car with safety features – Safety features like lane departure warnings, adaptive headlights, and automatic emergency braking can boost your likelihood of accident-free driving. Many insurance companies will give you a lower auto insurance rate because of this.
Pay your premium upfront – Many insurance companies will offer college students a discount for paying their yearly premium all at once, instead of breaking it up into quarterly or monthly payments. If you have the means, you can save a lot this way.
Exhibit responsible driving behaviors – When it comes to car insurance, it pays to play it safe. Insurance companies offer discounts for safe behaviors like wearing a seat belt, avoiding smoking and drinking, driving fewer miles, and having an eco-friendly vehicle.
The best thing college students can do to lower their car insurance is to compare quotes at Online Auto Insurance. You can get fast and free quotes from nearly every insurance provider in the industry, easily compare your options, and find the exact right amount of coverage for your situation.
Online Auto Insurance has a simple interface that lets you search for cheap car insurance by state, and their live agents can answer any questions you might have.
Compare car insurance quotes with Online Auto Insurance today.
New Hampshire Department of Safety, Division of Motor Vehicles. Insurance Requirements/SR-22.\ https://www.nh.gov/safety/divisions/dmv/financial-responsibility/insurance.htm
Virginia Department of Motor Vehicles. Insurance Requirements. https://www.dmv.virginia.gov/vehicles/#insurance.asp
Children’s Hospital of Philadelphia. Study Pinpoints Common Critical Errors in Teen Crashes. \ https://www.chop.edu/news/study-pinpoints-common-critical-errors-teen-crashes
U.S. Department of Transportation, National Highway Traffic Safety Administration. Traffic Safety Facts. https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812926
[^1]: New Hampshire Department of Safety, Division of Motor Vehicles. Insurance Requirements/SR-22. \ https://www.nh.gov/safety/divisions/dmv/financial-responsibility/insurance.htm
[^2]: Virginia Department of Motor Vehicles. Insurance Requirements. https://www.dmv.virginia.gov/vehicles/#insurance.asp
[^3]: Children’s Hospital of Philadelphia. Study Pinpoints Common Critical Errors in Teen Crashes. \ https://www.chop.edu/news/study-pinpoints-common-critical-errors-teen-crashes
[^4]: U.S. Department of Transportation, National Highway Traffic Safety Administration. Traffic Safety Facts. https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812926