The Best Car Insurance for College Students

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Insuring a car for a college student doesn’t come cheap. 

The average annual cost for full coverage car insurance for an 18-year-old driver on their parents’ policy is $1,975, according to the latest Bankrate data. That’s roughly $300 more a year than the same auto insurance policy for a 40-year-old driver. Students on their own policy will pay even more, up to $5,335. 

A common reaction to that sticker shock is to go for less coverage, but that might be ill-advised.  Jason Newell, managing insurance broker at 303 Insurance Brokers in Denver, Colorado, says lowering liability limits to save money leads to a greater exposure to risk and could end up costing you more in the long run.

“A lot of time the parents are trying to find ways to save money, and the way they’re going to save money is through lower liability limits, but that’s a huge exposure,” says Newell, who also notes that a standalone policy may have its own pitfalls: “If a college student goes off onto their own policy, it could have significantly less liability coverage and uninsured motorist coverage.”

There are plenty of smart ways to go about saving on auto insurance for college students and their parents — without sacrificing coverage. Here are some tips.

Should College Students Have Their Own Auto Insurance Policies?

If you’re a college-aged student moving away from home for school, you might be wondering whether you need your own auto insurance policy now.

Experts say college students who are on their own policies tend to pay higher premiums for the same amount of insurance than those who join their parents’ plan. That’s because younger drivers tend to pay higher rates overall and don’t qualify for as many discounts as older drivers. 

“It’s usually more expensive for the child to go out on their own. When the parents and the child are both rated on the auto policy, it splits up the risk instead of just having the one young driver,” says David Adler, president and owner of Adler Insurance Group in Denver. 

From example, GEICO charges an average of almost $4,000 per year for full coverage car insurance for 18-year-olds with their own auto policies, and Allstate charges almost $6,000 annually, according to Bankrate data.

In general, students who have the option of being on their parents’ insurance should do so, experts say. 

Pro Tip

If you’re heading off to college, be sure to ask your insurance company about new discounts you might qualify for.

“Cost-wise, it does make sense to include them on the parents’ policy in a lot of circumstances,” says Adler. However, “if they have a colorful driving record, like a DUI or things like that, it may make sense to split them off on their own.”

Where you’ll live while attending school and who owns the car are two factors that will heavily influence whether you get your own auto policy or not. If your name is on the car title, you’ll have to get your own insurance policy. But if the car is in your parent’s name or jointly titled, Newell recommends staying on your parents’ policy until you’re financially independent. All but two states require you to have car insurance if you own a car. 

“If mom and dad own the car still, the college student can’t get their own policy,” says Newell.

Our Picks for the Best Cheap Car Insurance for College Students

While there isn’t a single car insurance that’s best for every college student, we think these are the ones to consider, based on our methodology. Keep in mind average rates on this list are based on kids on their parents’ policy. If you decide to get your own auto policy, expect to pay thousands more every year. 

Nationwide 

Nationwide offers college-aged drivers fairly low auto insurance rates. If you decide to insure your vehicle with Nationwide, the average cost of full coverage car insurance for an 18-year-old on their parents’ policy is $1,054 annually. It doesn’t have many discounts for students, but makes up for it with its low rates. The company offers a good student discount; college students age 16 to 24 who maintain a B average or better are eligible for it.

Nationwide Student Discounts

  • Good student discount

GEICO 

Geico’s low auto rates and abundance of discounts make it an affordable choice for college students. Geico’s average cost for full coverage car insurance for an 18-year-old on their parents’ policy is $1,519 a year, but college students can ask for several discounts to bring the cost down even further. Geico offers discounts for membership in several organizations, as well as a good student and driver training discount. College students who use the good student discount rate can save up to 15% per year on Geico auto policy.

GEICO Student Discounts

  • Good student discount 
  • Fraternity, sorority, and honor society membership discounts
  • Alumni associations, colleges, universities, and student organization discounts
  • Driver training discount

State Farm

State Farm has a long list of auto insurance discounts, but some of its best ones target student drivers. Students with State Farm pay on average $1,615 for full coverage car insurance every year. State Farm offers the largest good student discount of the bunch — up to 25% off for students who are between 16 and 25 years old and can maintain a GPA of at least 3.0. Students who are going to college or university at least 100 miles from their home may be eligible for a student away at school discount.

State Farm Student Discounts

  • Good student discount
  • Distant student discount
  • Driver training discount

The Travelers Companies

If you’re 18 years old and have an auto policy with Travelers under your parents, full coverage car insurance costs an average of $1,641 per year.. That figure is on the higher end, but with Travelers, college students can qualify for a number of discounts . In addition to the good student and distant student discounts, Travelers also offers a driver training discount for young drivers. Eligibility for the good student discount with Travelers requires a B average or its equivalent or a top 20% ranking in their class. College drivers must be going to school at least 100 miles from home to be eligible for Travelers’ distant student discount.

Travelers Student Discounts

  • Good student discount
  • Distant student discount
  • Driver training discount

Best Cheap Car Insurance for College Students of 2021 Summary

Insurance CompanyAverage Annual Premium for Full CoverageJ.D. Power Auto Claims Satisfaction Score, 2020A.M. Best Rating, 2020States Available
Nationwide$1,052876/1000A+46
GEICO$1,519871/1000A++50
State Farm$1,615881/1000A++50
Travelers$1,641861/1000A++43

Car Insurance Discounts for College Students

Discounts for auto insurance can turn a pricey policy into a much cheaper one, so it’s important to ask your auto insurance company what discounts you’re eligible for. There are popular discounts that college students can take advantage of:

Vehicle Discounts

  • Anti-theft discount 
  • Anti-lock brake discount
  • Passive restraint discount
  • Hybrid/electric vehicle discount
  • New car discount 
  • Low mileage discount

Policy Discounts

  • Multi-policy discount: You have multiple insurance policies with the same company.
  • Full payment discount: You pay your entire year premium at once.
  • Safe driver discount: You go a prolonged period of time without claims or accidents.
  • Customer loyalty discount: You’ve been a loyal customer for a certain amount of time.

Student Discounts 

  • Good student discount: You have good grades.
  • Driver training discount: You can take a driver education course approved by your auto insurance company.
  • Distant student discount: You don’t have access to a car, but you remain on your parents’ auto policy while you’re away at college.

Frequently Asked Questions

How much is the average car insurance for a college student?

The average annual cost for full coverage car insurance for an 18-year-old on their parents’ policy is $1,975, according to the latest Bankrate data. The data shows the average price drops a few hundred dollars every year as you get older. For example, the average annual cost for full coverage car insurance for a 20-year-old on their parents’ policy is $1,324 and $781 for a 22-year-old.

What is the cheapest car insurance for college students?

The cheapest car insurance for college students on our list is Nationwide. It costs $1,054 a year for full coverage car insurance for 18-year-olds on their parent’s policy.

Can parents keep an insurance policy on a car in another state?

There’s usually an exception for out-of-state college students who take their cars with them. If you’re a dependent driving a car owned by your parents, most states allow you to stay on your parents’ auto insurance policy while you’re attending college out of state.

Our Methodology

To determine our picks for the best car insurance for college students, we started with a list of 25 of the largest car insurance companies by premiums collected, based on data from the National Association of Insurance Commissioners. From there, we applied a series of filters to narrow the field across key categories like cost, availability, and customer satisfaction. 

For starters, all our top picks must be universally available to all consumers in at least 40 states. 

Our top picks offer at least one of the most popular student discounts (good student and distant student), which help make premiums more affordable. 

To gauge affordability, we looked at Bankrate’s average annual premium across these carriers and eliminated any with an average yearly cost of more than $1,975 for full coverage. That’s because the average annual cost for full coverage car insurance for an 18-year-old on their parent’s policy who drives an average of 12,000 miles a year is $1,975 (Bankrate, like NextAdvisor, is owned by Red Ventures.) 

Next, we looked at J.D. Power’s 2020 U.S. Auto Insurance Claims Satisfaction Study, and ruled out any companies that scored below 860 on a 1,000-point scale (the industry average was 872). 

Finally, we looked at each insurance company’s A.M. Best rating, which evaluates a company’s financial standing. Financial solidity matters for insurance companies because their customers depend on them to pay their claims if they’re in an accident or experience an insured loss. In other words, an insurance company that has the wherewithal to stay in business is more dependable in the long term. We ruled out any company that doesn’t have A.M. Best’s rating of A+ or higher. We also eliminated any companies that are involved in any active fraud investigations.