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Drivers that fall between the ages of 16 and 25 actually pay more for their car insurance than any other age group.
Unfortunately, young drivers are often seen as reckless drivers and more likely to commit moving violations and file claims against their insurance. The problem with this is that students can’t always afford decent car insurance because of this.
The question is which insurance companies are going to offer you a good policy without emptying your bank account. Well, we are here to help.
We have compiled a list of the best insurance companies that offer great policies at affordable rates, especially for students who are having to borrow money from their parents, or even friends.
We have taken into thought any discounts, perks, and other money saving opportunities to help you choose the right company and policy. These companies offer the best insurance coverage for the best prices.
Here are The Smart Investor Select’s picks for the top car insurance companies for college students:
Erie insurance offers low and discounted prices as well as low premiums. The company provides discounts for seniors, youngers, and safe drivers to keep prices affordable. It has all the expected auto insurance standard plans and extra coverage loaded with various benefits specific to each state.
The company has a series of unique extras and discounts which are largely unavailable in other insurance operations.
- Liability coverage
- Collision and Comprehensive Coverage
- Uninsured motorist protection
- Underinsured motorist protection
- Personal Injury Protection
- Affordable rates
- Attractive Discounts
- Customer satisfaction
- Lock-in feature
- Lack of a Mobile app
- It only operates in a few states
You can take advantage of quite a lot of bundling options with Nationwide that you won’t easily find with other insurance firms. Nationwide is great for you if you have a spotless driving record as you will be treated to some of the cheapest rates available.
However, if your driving history has some blemish, you might want to look elsewhere for coverage. Seniors will find this company more appealing than youngers as rates tend to get cheaper the older you get.
- Liability coverage
- Collision coverage
- Comprehensive car insurance
- Medical payments
- Uninsured motorists’ coverage
- Personal injury protection
- Property damage liability
- Roadside and accident assistance
- Financial capability
- Educational resources
- Well-designed website
- On your side auto repair network
- Well-crafted mobile app
- Unattractive prices for certain folks
- Inconsistency in support
- No ride-sharing protection
- Credit score checking
Low prices are one of the things that made Progressive so popular among Americans that the company even encourages you to compare its rates with other insurance providers right on its website with a price comparison tool.
You will find the company provides standard car coverage options other insurers offer (like liability, personal injury protection, medical payments, etc.) and perks (like accident forgiveness, deductible reduction, etc.) when Progressive covers you. Of course, Progressive offers other insurance products like home, life, and renters through third party companies.
- Liability coverage
- Comprehensive coverage
- Collision coverage
- Personal injury protection
- Uninsured/underinsured motorist coverage
- Medical payments coverage
- Pet injury protection
- Rideshare protection
- Leading car insurance company
- Encourages safe driving
- Accident forgiveness
- Competitive rates and discounts
- Name your Price
- No safety equipment discount
- Below average customer service score
The Liberty Mutual Insurance Auto policy is known for its affordable coverage prices and numerous discounts; this may be why it has a sixth-place largest insurer ranking. It provides several coverage options to select from, for you, for others, and your automobile.
Some of the packages are standard benefits that come with the policy, while some are additions for a price. This coverage includes vehicle, liability, medical, uninsured driver, car replacement, and reimbursement. Soldiers and school students are entitled to some discounted packages, as are cars and driving methods.
- Medical Payments Coverage
- Body Injury Liability Coverage
- Property Damage Coverage
- Brilliant Website Design
- Mobile Application on-the-go
- Numerous Policies
- Discount Offers
- High Financial Rating
- Above-average costs
- Differing geographical rates
GEICO provides lots of car insurance coverage options and is popular for its great customer service, as well as its great mobile app for customers.
GEICO focuses on online sales to customers rather than the use of agents, which has given the company the ability to keep low rates coupled with providing similar products of other big insurers. Due to its pricing and convenience, it is known as the best option for consumers that are cost-conscious.
- Property damage
- Bodily injury
- Personal Injury Protection
- Medical Payments
- Excellent 3rd-party ratings
- Great mobile app
- Multiple Policy discounts
- New cars have mechanical breakdown insurance
- Gap insurance absent
- It may be difficult to get a local agent
- Accident Forgiveness cannot be found in all states
- Some coverage options missing
Mercury is mostly known for its auto insurance services.
Mercury car insurance products include liability protection, collision protection, comprehensive coverage, medical payments coverage, personal injury protection (PIP), uninsured/underinsured motorist coverage, and rental car coverage. The additional coverages offered by Mercury auto insurance are roadside assistance and Ride-Hailing Insurance. Though its primary customer base is in California, it also renders some of its additional insurance services in 10 other states in the US.
- Liability Protection
- Collision Protection
- Comprehensive Coverage
- Personal Injury Protection
- Uninsured and Underinsured Motorists Coverage
- Wide local access
- Low rates
- Easy registration
- Digital ID
- Name your Price
- Limited benefits
- Delayed repairs
- Poor online reviews
Table of Content
What Does Car Insurance Cover?
Car insurance is designed to prevent you from paying the full cost of repair expenses or medical bills after a car accident. Each state requires a minimum coverage amount, so you will need to make sure your insurance includes those requirements.
The most common forms of car insurance are: Medical payments (MedPay) or Personal injury protection (PIP), liability insurance, comprehensive, collision, and finally uninsured and underinsured motorist coverage. Each covers different situations in the event of an accident.
PIP and MedPay
Liability insurance covers the charges of an accident you were responsible for. This would likely include injuries or damage to buildings and other types of property.
Comprehensive insurance covers you when you need to repair or replace your vehicle. It could have been damaged in any way, except from a collision with another car, as that falls under collision coverage.
Comprehensive coverage is for everything else- damage from weather, vandalism, falling objects, and more are covered.
Uninsured and Underinsured Motorist Coverage
Uninsured and underinsured motorist coverage will pay for damages caused by drivers with a low paying insurance or without car insurance. You state will likely require that you have a mix of these common car insurance forms in your plan.
All states require you to have PIP and liability insurance, at a minimum. You may need more coverage depending on where you live.
You may also choose some additional coverage options. Most will not add much to your policy, but they will still be beneficial in an accident. Roadside assistance, rental car reimbursement, and rideshare insurance are some examples.
How to Get Car Insurance For College Students
It can be challenging for college students to find the car insurance policy they need, since younger drivers have higher rates. However, you will want to shop around and compare all of the plans you come across. You can save hundreds of dollars a year by choosing the right insurance policy.
Usually, keeping a college student on their parent’s policy can save money, when compared to purchasing their own plan. The most significant downside is if the college student is in an accident, as it would raise the family’s rates.
If you are a college student looking for car insurance or the parent of a student thinking about buying them an individual plan, these are the steps you need to take.
- Determine how much coverage you need
- Get many car insurance quotes and compare them
- Visit websites that rank insurance companies
- Thoroughly read the insurance policy documents before signing
- Set up your payments
Step 1: Research and Compare Quotes
As younger drivers tend to cost more on insurance policies, it is crucial that you spend a lot of time reading quotes. You will want to be sure that you are getting a plan that fits both your needs and your budget.
It is also important you know how much coverage you need. That way, you will not end up paying out of pocket if you are in an accident with a lot of costly damages. First, the basic amount of coverage required by your state needs to be met.
Next, you will want to determine if you want additional coverage. Having more coverage is never a bad thing- if you are found at fault for an accident, it can save you a lot of money. However, you will need to make sure the extra benefits fit into your budget.
Step 2: Check Websites
There are plenty of sites online that allow you to compare car insurance rates. You will want to check out some, as they can give you an idea of what to expect from that company. Gabi is a popular option for many people.
They claim to save people hundreds of dollars on their insurance costs, so it may be worth looking into. The site is easy to use too. If you do not want to use that particular one, there are many other insurance comparison tools online.
Step 3: Finalizing
When you have found the company you want to purchase a policy from, you will want to complete the signup process on their website.
Before signing or finalizing anything, make sure that you read the documents given to you. That way, you will be informed on the policy and know exactly what you are agreeing to.
At this stage, you will also be able to choose how you want to step up your payments. For instance, you can pay up front or set up monthly installments. Which, in many cases, will be the route you want to go.
How to Get The Best Rate as a College Student
College students are usually on a very restrictive budget. Adding car insurance into that can be challenging- you will want to learn to find the best rate. The best way to find a better rate? Compare everything you find online.
Make Good Research
It may be time consuming, but you will want to do some research into all of the car insurance rates available to you. You will also want to ask companies for quotes, since your coverage and total cost may be different than the averages listed on their websites.
The reason why making all of these comparisons is so important, is that it will directly impact how much you spend. All insurance companies will look at similar factors about you to determine their rate, but each brand will have some variations. That is why two insurance companies can end up charging extremely different rates to the same driver.
As part of your research, be sure to check out comparison websites. They make it easier to view all of this data in one place.
Compare Apples to Apples
Once you have all of the information in front of you, you will want to compare them. You could go with the cheapest quote or check the premium options from each brand. If one of the quotes only has the minimum liability coverage required and another has more forms of coverage, the differences in cost will be noticeable.
However, you will want to choose the options that better suit your needs. If the higher rate has those options included, it could be more valuable to you.
The most important factors to compare are the rate quotes, when you can expect the price to lower, and if you can add any discounts to the rates.
Apply Discounts to Your Rate
That being said, college students can often get discounts on their car insurance. These are some examples that will lower your rates. You will need to check with your insurance company to determine what you qualify for.
- GPA Discounts – If you get good grades and maintain a specific GPA, the insurance company will offer you discounts.
- Trained Driver Discounts – For those under 21, you can receive discounts if you take a course in safe driving or another type of driver’s education class.
- Resident Student Discounts – If you move to your school and do not take your car with you, your parents can receive discounts on their rates.
- Anti-Theft Discounts – If you install a car alarm or other anti-theft device into your car, you can receive discounts from many insurance companies.
- Member Discounts – Some insurance companies will offer discounts to members of certain groups. For instance, fraternities, sororities, honor societies, and more student groups can qualify.
Cheap Car Insurance For College Students What to Consider and Why
College is expensive, so it is no wonder many students are looking to cut back on their costs. Saving money on your car insurance is a great way to cut back. When it comes to finding the cheapest options, these are our recommendations.
- Geico – Offers cheaper auto insurance to college students than the competition. They have low rates and offer plenty of discounts to student organization members. Plus, their premium rates are more than $1,000 cheaper than the national average.
- State Farm – Offers their customers many discounts on their policies. The best discounts are for the student drivers. The company also has GPA discounts and more, allowing students to save a good amount of money.
- Metromile – Offers college students who are not driving often plenty of discounts. Plus, they charge per-mile, which is very small for many students living on campus.
- Allstate – Offers many mobile apps that are helpful to students who are always on the move and need to access their insurance information easily. It is more expensive, but they have various options for students that make the policy a good value nonetheless.
- Liberty Mutual – Offers great discounts for good grades. They also allow you to receive additional discounts if you have taken a driving course and are under the age of 21.
One of the factors affecting the cost of auto insurance is age. Younger drivers are typically more likely to be involved in an accident or commit driving related offenses. This chart using data from The Zebra shows the average auto insurance costs for young drivers by company. It shows that while Travelers may offer the lowest rates on average for 25 year olds, it is not the cheapest option for 20 year olds.
This highlights the importance of shopping around for your specific circumstances.
There are plenty of car insurance companies out there, although you will want to be sure that you are choosing something right for you. You will need to ensure that your basic coverage requirements are met and that you can afford the payments.
Next, you will want to look into all of the discounts that the companies can offer to students. It helps if you ask the company for a quote, they may be able to factor those discounts into your estimated rate for you.
Is Car Insurance Cheaper For College Students?
Generally, no. Car insurance is much more expensive for young drivers, especially those in college. According to the Zebra research, most people will pay about $1,500 per year for their car insurance in the U.S.. College students pay nowhere near that amount. On average, college students will pay $5,000 per year- which is substantially more.
However, college students can receive more discounts than others. You will want to take advantage of that, in order to bring your monthly costs down. It will likely stay above the average of $1,500, but you will still be paying a lot less than you were without the discounts.
Age is one of the most significant factors in the cost of auto insurance. As drivers gain experience, insurance rates typically drop, as older drivers are less likely to be involved in an accident or commit a driving violation.
This chart with data from The Zebra shows the average car insurance rates by age group. It highlights that 16 to 19 year olds can expect to pay more than double their 20 to 29 counterparts. It also shows that rates decrease until the 60+ age groups. This is typically because older drivers are more likely to have slower reactions that could lead to an accident and may suffer more serious injuries in a mild to serious accident that is reflected in the insurance rates.
The best advice we can give to you would be to compare as many car insurance quotes as you can. When you factor in your discounts, you should be able to see which option is the cheapest.
However, cheapest does not always mean best. You will want to be confident you have the amount of coverage you need. If you follow all of our steps, it will greatly benefit you by lowering your cost.
How to Save Money on Car Insurance as a College Student
If you want to save money, always start by checking for discounts that can be applied to your policy. If you qualify for GPA discounts, live on campus, drive infrequently, and are part of many college groups- you likely can combine all of those discounts. That way, you can save a good portion of your money.
However, that may not always be an option for every student. If you are under a certain age (usually 25, but may vary per state), you can stay on your parent’s car insurance plan. When you are part of a family your plan, your cost is going to be way less than if you were on an individual insurance plan.
One of the best ways to save money, would be to leave your car at home. Many campuses offer transportation and make it easier to get around, so you might not need your own vehicle anyway. If you are not using the car, then you would be eligible for discounts or reduced pricing.
Overall, there are many ways to save money on your car insurance. Each method will apply to different students in different situations. But, you will still be able to save money if you don't give up and spend time checking for all of the discounts and other possibilities.
What Are The Discounts College Students Can Get?
There are many discounts that college students can get. We mentioned them above, but would like to delve into more detail here, as well as some of the popular companies that offer them.
Resident Student Discount
If you live at the college, you can save money on your policy. In most cases, the company requires that your school be at least 100 miles away from your home. To qualify, you will also need to be driving less often because you are at school.
Good GPA Discount
You can receive a discount if your GPA is a 3.0 or above. It is always a good idea to ask your insurance provider if you qualify for this one. Most of the time you will need to be under the age of 25 and a full-time student.
If you have more than one policy, many insurance companies allow you to bundle your policies together, which is convenient and saves you money. Most companies offer a lot of savings for those who open multiple plans with them.
Car insurance companies love when you add anti-theft devices to your car. They offer plenty of discounts for different devices. A new car alarm or other item can save you money. Plus, it will make you feel more safe if you are starting school in a new area.
What Else to Consider
Many insurance companies offer plenty of discounts. You will want to find a policy with a company that allows you to earn as many discounts and rewards as possible. However, everyone’s situation is different. What is a great policy for you may not be true for someone else.
Here are some popular companies that offer discounts for students:
- Geico – Offers GPA/Good Student Discounts, Good Driver Discounts, College Group Membership Discounts, and other Organization Discounts
- Allstate – Offers discounts for students who are going to school far away from home
- Metromile – Offers Good Drive Discounts
- Liberty Mutual – Offers GPA/Good Student Discounts
Car Insurance Companies: What Can We Learn From J.D. Power Research?
According to J.D. Power research, the information on insurance websites is considered more important now than directly talking with an agent. A new record high in customer satisfaction was driven through digital means. If you are a college student, you probably feel the same way when interacting with insurance companies- you want to do most of it online.
In the J.D. Power 2020 U.S. Auto Insurance Satisfaction Study, State Farm, Erie, and Geico were the top three national insurance companies with the highest overall customer satisfaction rankings. What does that mean for students looking for insurance?
Overall, the study shows which insurance companies provided the best service to their customers. If you are trying to find a new group to open a policy with, you would likely have a good experience with those brands.
How to Get a Discount For Good Grades
If you have good grades, your insurer will likely give you a discount. If you want to receive it, you can start by viewing your insurance provider’s website. Sometimes this information is not easily available, so you might need to reach out to their customer service team.
Once you have received the discount, you will want to keep your grades up. Most car insurance discounts require that you have at least a 3.0 GPA, which is a B average.
It is important that you always check with your provider. Discounts often vary between states, your age, and more factors- making it crucial you check with the company. Smaller insurance companies are less likely to provide this discount as well.
Car insurance is not cheap, especially when you are a student. However, if you have good grades already, it can be worth pursuing the discount. If you want to receive a lower cost on your car insurance, the discount can also be a great motivator for bringing your grades up.
Do You Need Your Own Car Insurance in College?
You do not technically need to get an individual policy as soon as you reach college age. Most of the time, it is a better idea to stay on your parent’s plan until you are more financially stable or reach an age where you are not allowed to be on it anymore.
You might need your own insurance if you were in previous accidents, as it would greatly impact the cost of your family’s plan. In cases like those, you would want to consider getting on your own plan.
However, the situation varies between students. You will want to talk with your family or the person responsible for handling the car insurance at home. If you do not need to be on your own plan yet, it would benefit you greatly not to make the switch.
Does Car Insurance Go Down When You Turn 21?
Not significantly. You will start to see a decline in your cost when you turn 21, although you will notice larger drops when you reach the age of 25. As long as you drive safely and are not in any accidents, your rates will go down each year.
Insurance companies do this because they believe younger drivers are more of a risk. As you age, they charge you less. On average, 21 year olds pay $451 less than 20 year olds over a six month period- your rate will drop each year after that too.
If you were in an at-fault accident, it can take three years for your rates to start going back down. If that has happened to you in the past, it may mean your rate will drop later than at 25 as well.
Can College Students Stay On Their Parents’ Insurance?
College students can usually stay on their parents’ car insurance policy if their primary address is listed as their parents house. That way, you can remain on their plan even if you are going to college out of state. However, if the student owns the car, they will need to be put on their own plan.
If you are a parent, you will want to keep your student on your policy if they are bringing the car to college to use or are commuting to a nearby school, as they will be using the car often.
In most cases, you will need to be living in the same house as your parents to be on their plan. Those attending college are usually the only ones who that rule does not apply to. You will want to talk with your car insurance provider to be sure.
How Long Can I Stay on Parents’ Car Insurance?
Car insurance is a lot different than health insurance. You are allowed to stay on your parents’ car insurance policy as long as you still live in their home or go college full time. There is no age limit to being on family car insurance plans.
If you get married, you will need to find a new policy with your new spouse. Plus, if you register a new car in your name, you will need a new plan to cover it.
In short, you can stay on their policy as long as you are a dependent, even if you move to a dorm. Dependents are family members who live at home and need help paying for their school housing, tuition, food, and other costs. If you co-sign their student loans, that also counts.
How to Check an Insurer’s Complaint Record
A claim complaint ratio shows the performance of a company compared to other companies in the same industry. It shows what companies generate more complaints per $1 million in their premiums than other companies.
The amount of complaints a company receives is important. You want to be sure they will assist you if you were to get into an accident- otherwise, it was not worth paying them in the first place.
You can find this data in the National Association of Insurance Commissioners’ Consumer Information Source. You will need to type in the name of the company and see what shows up. Additionally, it helps if you add your state and other information.
Is Car Insurance For Students Worth The Cost?
Overall, that is going to depend on the student. Some students enjoy having the freedom to drive wherever they need to. Others live close enough to the campus to walk or take transportation.
It is worth the cost if your student commutes or drives their car frequently on campus. If they will be leaving their car at home, then there would be no point in paying for the insurance.
When trying to determine whether it is worth the additional expense, think about how often you plan to drive and whether or not you can take the bus or other means of transport. If you can and the college is already including transportation in your tuition cost, then you may want to lower your car insurance.
How Much Does It Cost to Add Car Insurance to a 20 Year Old?
Car insurance for 20 year olds is expensive. If you want to add one to your policy, we recommend that you browse through all of your options. On average, you can expect to spend $4,000 – $6,000 on a 20 year old in a year for their car insurance.
However, that is still cheaper than the average for an 18 year old, but still more expensive than adding someone who is 25 or older. You will want to ensure that you check all of the student discounts your policy has to offer. That way, you can at least bring that cost down some.