We get it—researching auto insurance for college students for the first time can be overwhelming. Between the hidden fees and the jargon, navigating the landscape can be confusing in some scenarios—and downright frustrating in others. That’s why we’ve created this guide. Whether you’re looking to buy your own insurance, or need to be added to your parents’ insurance while still making your own payments, we’re here to explain how car insurance works.
Generally speaking, the cost of car insurance for college-aged kids (we’ll be using the ages between 18 and 22 as a rule of thumb from here on out) is higher than for older adults. Why? Because you’re riskier to insure. Don’t take it personally! This is just one of the reasons that it’s important to analyze and understand the entirety of your current situation. Because sometimes, staying on your family policy makes the most sense. Other times, it’s optimal to open your own plan.
To help assess your own situation, here are some questions you can ask yourself.
Where are you living?
Should you bring a car to college in the first place? If you own a car, we recommend thinking about the big picture. Whether you’re living off-campus in a large city or urban environment, or in university-provided dormitory or on-campus housing, it’s essential to consider all associated parking fees. It’s also important to consider non-financial burdens like unpredictable traffic.
While a vehicle provides the luxury of weekend trips and increased opportunities, it also comes with liabilities—even before we consider insurance. And because college costs can add up quickly, it’s important to gauge whether it’s a good idea to bring your car along with you.
What are the advantages of college students staying on a parent’s policy?
It may be cheaper.
As we mentioned, insuring college kids is seen as a risk by many companies (You risk taker, you!). With that in mind, your rates may frankly be more affordable if you stay on your family plan.
Simply put, it will likely be easier for you and your family to manage a single policy. Staying on your parents’ plan also extends your options for driving, should you use their vehicles when you visit them during summer break.
You may not have credit.
Building credit can be a long process. If you’ve never purchased a car or owned a credit card, your credit score is most likely on the lower end of the spectrum. Many times, credit scores are used to determine your insurance rates—so if you have limited credit history, you may be considered a higher risk, which will result in higher rates.
You may qualify for discounts.
Staying on your parents’ plan may save them a buck or two. Maybe you’re living in an apartment and also need renters insurance. With Elephant, you can bundle your renter’s and auto insurance together to save. In fact, with Elephant students can also qualify for discounts in exchange for good grades. It’s a win-win situation.
You may be protected outside of driving.
Anticipate you’ll be relying on rides from friends? Planning to bike around campus? It may make sense to stay on your parents’ plan. Depending on the details of their plan, you may benefit from personal injury protection coverage (PIP) and uninsured/underinsured motorist coverage (UI/UIM) independent of car ownership.
PIP often provides medical payments if you’re injured as a passenger in someone else’s car, as a pedestrian, or even as a cyclist. And UI and UIM often provide protection if you’re involved in an accident with an uninsured or underinsured driver. It’s better to be safe than sorry—even if you’re relying on alternative modes of transportation.
When should you get your own car insurance?
You own your own car.
Whether you’re planning to purchase a new vehicle, or have an existing vehicle titled in your name, you’ll need to purchase your own policy. There’s really no way around this one.
You’re living out of state.
Many states allow out-of-state students to remain on their existing family insurance plans, as long as they share a primary residence with their parents. Others require you to purchase your own policy. However, if you’re living off-campus and your primary residence is out of state, you’ll need your own policy.
What car insurance coverage do you need?
Sometimes understanding insurance lingo can seem like the hardest part. We’ll break down the different types of car insurance coverage so you can make the best decision about what’s right for you as a college student!
Often referred to as “minimum coverage,” liability insurance is required in all states—and is basically the foundation of all auto insurance. If you cause a car accident, liability coverage helps cover property and bodily injury costs. Property damage applies to all vehicle repair and replacement costs, as well as property damaged as a result of the accident, such as buildings, fences, and phone poles. And bodily injury applies to all medical expenses and may even cover wages or legal fees.
Often required if you’re leasing or financing a vehicle, collision coverage helps protect your own car. Whereas liability coverage encompasses the other driver, collision insurance helps pay to repair or replace your vehicle in the case of a collision with another vehicle or object, or a single-car accident. Collision coverage is determined by a deductible, which refers to the amount of money you pay before your coverage helps pay for a claim.
Also considered the coverage that involves everything “other than collision,” comprehensive covers damage that’s out of your control. This includes damage resulting in everything from theft, vandalism, weather, and accidents with animals. For many providers, it also includes windshield and glass damage. Comprehensive is optional, but like collision, many lenders require it if you’re leasing or financing your vehicle.
Buying car insurance for the first time can be confusing, but it shouldn’t be. Why worry about the process when you can rely on Elephant to take care of you? We’re here to make auto insurance as transparent and understandable as possible—so you can focus on the things that matter.
Article last updated on June 25th, 2023 at 6:54 pm