What Should College Students Know About Car Insurance?

TL;DR: Car insurance can be costly for college students due to age and limited driving experience, but there are smart ways to save. They’re all listed down below for all you young drivers to make smarter decisions. 

(For guidance or a fast quote, call Insure on the Spot at 773-202-5060 for help getting affordable coverage before you hit the road.)

How can I save money on car insurance as a college student?

Car insurance rates for young drivers are typically higher than for more experienced drivers. Insurers consider drivers aged 18–23 higher-risk, which leads to steeper premiums. In fact, an 18-year-old driver might pay around double what a 25- or 30-year-old does for the same policy. The good news is there are several ways college students can cut insurance costs while still carrying essential coverage:

Stay on your parents’ policy if you can

If possible, remain on a parent’s auto insurance policy because it’s usually much cheaper than buying your own, since you’ll benefit from your parents’ lower rates and any multi-car discounts. This move alone can save you hundreds of dollars a year. (Many college students keep a parent’s address as their permanent residence to stay eligible for family coverage.) Eventually, when you truly move out or have a car titled solely in your name, you’ll likely need your own policy – but until then, take advantage of the cost savings of staying on your parents’ plan.

Use every student discount available

Many insurance companies offer a good student discount if you maintain good grades – often a “B” average (3.0 GPA) or higher. This can reduce your premium by roughly 10–15% on average. If you’re going to school far from home and not bringing a car, ask about an “away at school” discount. Insurers will often lower your rate if you’re over 100 miles away at college without regular access to the family car. You might also qualify for other discounts, like savings for completing a driver safety course or for driving a car with certain safety features. Don’t be shy — ask your agent which discounts you’re eligible for as a student.

Choose the right coverage (and car) for your needs

If your car is older or not worth much, you could consider carrying liability-only insurance (just the state-required minimum coverage) instead of full coverage. Liability-only policies cost less because they don’t pay for damage to your own vehicle. This can be a reasonable way to save money if you could afford to repair or replace your car out-of-pocket or you don’t drive it often. On the other hand, if you have a newer car or a loan, you’ll want collision and comprehensive coverage to protect its value (and your lender will require it). Also, choosing a practical vehicle can keep insurance costs down. Sporty or luxury cars cost more to insure, so if you have the option, stick with a reliable used sedan or any car with a good safety record – your premiums will be more affordable. Additionally, opting for a higher deductible (the amount you pay out of pocket on a claim) can lower your premium, but make sure you could cover that deductible in an emergency.

Drive safely and build your insurance history

One of the best ways to save in the long run is to keep a clean driving record. Some insurers offer telematics programs or usage-based insurance for young drivers – typically an app or device that monitors your driving habits. If you drive safely (no hard braking, excessive speed, etc.), you could earn discounts for good behavior. Similarly, if you don’t drive very often (maybe your campus is walkable or you use public transit), look into low-mileage discounts or pay-per-mile insurance plans. Driving less means fewer opportunities for accidents, which insurers reward with lower rates.

Just to put things in perspective, here’s a quick look at how much car insurance costs tend to drop as a driver gets older:

As you can see, young drivers pay much more – but the silver lining is that each year you maintain a good record and get a bit older, your rates should start to improve.

How can I find affordable and reliable car insurance in college?

Car insurance rates can vary widely between companies, especially for younger drivers, so it pays to shop around. To find an affordable and reliable provider as a student, consider the following:

Compare quotes from multiple insurers

Prices for the exact same coverage can differ by hundreds of dollars from one company to another. Use online quote tools or work with an independent agent to gather several quotes. Be sure to compare apples to apples in terms of coverage levels. You might be surprised which insurer offers the best deal for a student driver.

Look for student-friendly insurers

Some companies specialize in high-risk or young drivers, or they have specific programs for students. For example, certain insurers might forgive a minor accident for first-time drivers or provide flexible payment plans for those on a tight budget. Seek out providers known for working with college students or first-time insurance buyers. Check customer reviews and ask friends for recommendations – you want a company that is responsive and fair if you have to make a claim.

Check financial stability and coverage options

A low price is great, but not if the company can’t pay claims or support you when you need it. It would really help if your insurer is reputable and licensed in your state (you can verify a company’s license and complaint record through your state’s insurance department). Also, review what coverage options they offer. Do they provide extras you might want, like roadside assistance or rental car coverage, at a good price?

Consider working with an insurance agent or broker

An agent (especially an independent one) can help find you the best deal among multiple companies and explain any confusing terms. If you’re in Illinois, for instance, Insure on the Spot is a local provider that has years of experience helping young drivers find cheap coverage. We can make sure you’re getting all the discounts you qualify for and help bundle policies if needed.

What car insurance coverage do I need as a college student?

At a minimum, you must have whatever coverage your state law requires to drive legally. Every state has its own laws for the minimum liability insurance you need. (Liability insurance pays for injuries or damage you cause to others.) If you’re attending college in a different state than your home state, be sure to update your policy to meet that state’s requirements. Your liability limits must be at least the legal minimum in the state where your car is primarily kept. For instance, Illinois requires drivers to carry at least $25,000 per person/$50,000 per accident in bodily injury liability and $20,000 in property damage liability, along with uninsured motorist bodily injury coverage of $25,000/$50,000. Other states may mandate different amounts – check with the local DMV or insurance department for specifics.

Beyond the legal minimum, go for optional coverages that make sense for you. For example, collision and comprehensive coverage will be important if your car is valuable (or financed), but you might skip them to save money on an older car that isn’t worth much. Uninsured motorist coverage is required in some states and a smart add-on even if optional, since it protects you if an uninsured driver hits you. If you’re in a no-fault state, you’ll need Personal Injury Protection (PIP); otherwise, having some medical payments coverage can still be useful to cover injuries. Extras like roadside assistance or rental car coverage are up to you — they’re affordable and handy, but not essential.

As a college student, take a hard look at your personal circumstances. If you’re bringing a car to campus, make sure you have enough coverage to protect yourself financially. Accidents can and do happen, and you don’t want to be stuck with huge bills because you skimped on insurance. Conversely, if you rarely drive or you’re leaving a car back home for the semester, you might scale back to just the necessary coverage to stay legal (and maybe keep comprehensive coverage on the stored car to protect it against things like theft or fire). The key is to tailor your policy to your actual needs and risks.

Note: Always inform your insurance company if your situation changes. Moving to a new address (or state), bringing a car to campus, or even lending your car to a friend are things that can affect your coverage. It’s better to update your policy beforehand than to find out after an incident that something wasn’t covered.

Can I get car insurance as a college student without a car?

Yes, you can still get car insurance even if you don’t own a car. One way is to purchase non-owner car insurance, which is a special policy that covers your liability when driving a vehicle that isn’t yours. It’s relatively inexpensive and ensures you’re protected if you borrow or rent a car and happen to cause an accident. Alternatively, if you occasionally drive a car that your parents or someone you live with owns, you can be added to their insurance policy as a listed driver. And if you only drive someone else’s car once in a while with their permission, their insurance typically covers you automatically (this is called permissive use). The key is to never drive without some form of insurance coverage in place, because an accident can be financially devastating if you’re uninsured.

What if I drive a car that’s not in my name while at college?

Many students drive cars that are owned or registered to someone else, such as a parent or another family member. Here’s what you need to know about insuring and driving a car that isn’t officially yours:

Insurance follows the car, first and foremost. Generally, the personal policy on a vehicle will cover anyone who drives that vehicle with the owner’s permission. So if your parents own the car and you’re an authorized driver on their policy, that policy will cover you even while you’re away at college. Similarly, if a friend lends you their car for a one-time errand, their insurance usually extends to you (this is called permissive use). However, there are a few important caveats to keep in mind.

First, if you’re going to use someone’s car regularly (e.g. you keep your parents’ car with you at school), you should be listed as a primary driver on that car’s insurance. Otherwise, the insurer could deny a claim, arguing they weren’t informed that you were essentially the main driver. Yes, it might raise the premium slightly, but it ensures you’re properly covered.

Second, if you take a car to a different state for college, make sure the insurance is adjusted for that location. Inform the insurer that the car will be “garaged” (kept) at your college address during the school year. Insurance rates and legal requirements depend on where a car is primarily driven, so the policy needs to reflect your college location.

Lastly, if you’re driving a car owned by someone outside your immediate family (say a boyfriend/girlfriend or roommate’s car), remember that you generally cannot insure a car you don’t own – the owner needs to insure it. If you become a frequent driver of that car, ask the owner’s insurer about adding you as a named driver on their policy. And if the car’s owner doesn’t have insurance, do not drive that car. It’s not worth the risk.

In summary, you can drive a car registered to someone else, but make sure there is valid insurance on it and that you’re covered under that policy. Verify that the owner has active insurance and clarify your usage with them (and their insurer, if needed). It’s far better to sort this out beforehand than to face an uninsured accident situation later.

FAQ: College Students and Car Insurance

Can I stay on my parents’ car insurance policy while I’m in college?

Yes, in most cases college students can stay on their parents’ auto insurance policy, and this is often the cheapest option. As long as your permanent address is your parents’ home, insurers usually consider you part of the household (even if you’re away at school). If your parents own the car you drive, that car should be on their policy with you listed as a driver. This way, you benefit from their multi-car discount and their insurance history. Just make sure everyone is honest about where the car is primarily kept (at home or on campus). Note: Once you move out permanently or have a car solely in your name, you’ll likely need to get your own policy.

What if my car is in my name? Do I need my own insurance?

If a car is titled and registered in your name, you should have an insurance policy in your name for that vehicle. You might still be able to be on your parents’ policy if you live with them, but many insurers prefer (or require) the policyholder to also be the car’s owner. The key factor is where the car is primarily kept and who is driving it. If you own the car and you’re the main driver, it often makes sense to get your own policy. That said, if you’re still mostly living at home or your parents co-signed the car, talk to your agent – you may be able to continue on your parents’ policy temporarily. Always clarify this with the insurance company to avoid any coverage gaps.

Do I need insurance if I leave my car at home and don’t drive it at school?

Yes, you generally still need to maintain insurance on a car you own, even if it’s sitting at home while you’re away at college. As long as the car is registered and plated, most states legally require it to be insured even if you’re not currently driving it. If you drop insurance and something happens (e.g. the car gets stolen or damaged, or you decide to drive it on a visit home), you’d be out of luck – and you could face penalties for the lapse. Letting your insurance lapse can also lead to penalties (for example, Illinois imposes fines and registration suspension for driving uninsured). It’s usually best to keep at least the minimum liability coverage active on your car, even if you aren’t using it.

What discounts are available to college students on car insurance?

Students should definitely ask about discounts! Common ones include:

• Good Student Discount: If you have a B average or better (3.0 GPA or above), many insurers will give you a discount (often around 10% or more) for being a responsible student.
  
• Distant College Discount: If you attend school far from home (e.g. 100+ miles away) and don’t have a car with you, insurers often lower your rate since you won’t be driving much during the school year.
  
• Driver Training Discount: If you’ve taken a certified driver’s education or defensive driving course, you might earn a discount. Some companies have safe driver programs specifically for young drivers.
  
• Multi-Car or Family Discount: If your car is insured on the same policy as your parents’ vehicles, you’ll typically share in the multi-car discount. Likewise, if your family bundles auto with home or renters insurance, there are additional savings.
  
• Safe Driver Discount: If you maintain an accident-free and ticket-free record, you’ll start qualifying for lower rates. (Some insurers even offer accident forgiveness for one minor incident, which helps avoid a big surcharge.)
  

Every insurance company is different, so ask your provider which discounts you can get. These savings can really add up and make a big difference on a student budget.

What’s the cheapest car insurance option for college students?

Usually, the cheapest route is to stay on a parent’s plan if possible, since their policy and multi-car discounts keep costs low for young drivers. If that’s not an option, carrying only your state’s minimum required liability coverage – especially on an older, inexpensive car – will generally be the least expensive way to stay insured. (Of course, minimum coverage provides the least protection, so only go that route if you can handle the risk.) If you don’t own a car at all, a non-owner insurance policy is very affordable and meets your legal requirements when driving. In all cases, make sure to take advantage of any discounts you qualify for and shop around for quotes, because the company that’s cheapest for one student might not be cheapest for another.

Still have questions or need help getting insured? Insure on the Spot is here to assist. We’ve helped thousands of students and first-time drivers in Chicagoland get the coverage they need at prices they can afford, even those who required SR-22 filings after a violation. You can get a free quote online or call 773-202-5060 to speak with a friendly agent.