College is expensive and most students need to save money whenever they can. When on a budget, college students may have to periodically evaluate where they can save or spend less to make ends meet.
One of those unavoidable monthly budgetary items is car insurance. Depending on the type of car you drive and your driving record, auto insurance rates can vary greatly. Here, we present some ideas where you can save money and get the cheapest car insurance options for college students available.
Stay on Your Parents’ Insurance
Your parents probably have been driving for quite some time. If they’ve been safe drivers, it translates into good rates. Those good rates can benefit a young college student. Staying on your parents’ insurance and continuing safe driving can provide substantial insurance savings.
There are certain pros and cons for staying on your parents’ insurance, as we describe here.
Young drivers are statistically the most likely to cause or get into an accident. This data is what insurance companies use to set premiums. Your parents’ policy will offer a benefit, as long as you maintain a good driving record.
Because insurance companies feel that if a child is on their parents’ plan, they are less likely to drive recklessly, and therefore, incurs less risk to the insurer, resulting in cheaper rates.
Establishing your own insurance policy separate from your parents, may help you establish credit along with your driving history that can be used by insurers to offer low rates in the future. There are benefits to establishing your own plan, however, if you aim is to save money, then staying on your parents’ plan is the best option.
Reconsider Collision and Comprehensive Coverage
Collision and comprehensive coverage are two ways insurance policies protect your vehicle. While collision coverage protects you in case your vehicle collides with another vehicle or object, comprehensive coverage protects you against theft or damage when your car is not moving.
Combined, these two types of insurance provide full coverage, or what is known in the industry as “combined coverage” on your vehicle and offer full protection against damage.
If you have an older vehicle, reconsidering comprehensive coverage can help reduce your premium bill.
What are the Pros and Cons of Collision Insurance?
Collision coverage protects you in case of a collision with another vehicle, regardless of who is at fault. Whether you collide with another vehicle, an object, or a person, this type of insurance will cover repairs to your car.
Collision coverage does not cover all circumstances. For example, if your car is damaged in a collision with an animal that runs across the road, your collision policy will not cover you. This type of collision would be covered under a comprehensive policy.
Having a combined coverage policy is more expensive. Having only collision coverage may save you money on your policy, but it may not even be feasible for your situation. For instance, if your car is financed, your lender may require that you always carry full coverage.
What Does AA Comprehensive Car Insurance Cover?
This type of comprehensive coverage offers some key benefits. If your car is damaged, comprehensive coverage will provide for repair or replacement of the vehicle at an agreed upon replacement cost.
The average insurance settlement for rear end collision is around $15,000. With comprehensive coverage, your insurer has liability, and that cost is paid for by your insurance company.
Try Usage-Based Time Insurance
Usage-Based Insurance (UBI) is becoming popular across the industry as a way to reduce insurance costs. UBI uses telemetric analysis to evaluate your driving habits and customize your car insurance policy based on those habits.
UBI is growing in popularity, with driving data gathered from plug-in hardware to mobile apps and embedded telemetry within vehicles. This driving data culminates into a driver score, which helps the insurer better determine the risk involved with insuring your vehicle.
Ask About Discount Car Insurance for Students
Almost every insurance company offers discounts for good students. These discount student rates include car insurance F1 visa holders can afford. Ask your insurance company what type of discount they provide for college students.
The savings range from 10% to 15% off your total bill if you can demonstrate you’re a diligent student with good grades.
To obtain a discount, you will be required to show proof of your achievements. To be considered a good student, you’ll have to prove one or more of the following:
- Good standardized testing demonstrated through SAT, ACT, or PSAT scores
- Grade Point Average of 3.0 or better, which equates to a B grade
- A letter signed by an administrator attesting to your good grades
- A ranking in the top 20% of your class
- Bachelor’s degree
- Associate degree
- Proof of honor roll or Dean’s List
Finding Cheap Car Insurance for College Students
There are other ways for students to find cheap car insurance. If you are currently looking for insurance, don’t go with the lowest offer. Shop around and look for rates that are low but still provide you with the best bang for your buck.
Dozens of insurance companies are vying for your policy. Make them work for it. If you are looking for insurance, make them offer you a good policy before you agree to sign.
Frequently Asked Questions
Do I have to Pay Auto Insurance Deductible Upfront?
The quick answer to this question is no, you don’t have to pay deductibles up front. Your deductible payment is only due when you make a claim. If you make a claim that is higher than your deductible, then you are responsible to pay that deductible payment before your insurance covers the loss.
Does my Credit History Affect my Insurance Premiums?
Yes, in most states, your credit history is used to determine the risk factor for insurance coverage. There are only a few states that do not allow your credit history to be used in determining your auto insurance rates.
Does my Care Model Affect my Insurance Rates?
Yes. Insurance companies review car models to determine which are more likely to incur larger repair or replacement costs. Expensive and more powerful cars are more likely to be involved in accidents, and because of those statistics, promote higher insurance premiums.
What is a Collection Deductible Waiver?
A deductible waiver prevents you from having to pay a deductible if your car is an accident where an uninsured motorist is involved. It essentially protects you from an accident caused by an uninsured driver. If an uninsured driver is involved, and there is no fault of the insured, this policy provides comprehensive coverage to the insured.
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