In addition to the expensive tuition, room and board, and school supplies that must be paid for, many college students and their families face the prospect of high auto insurance costs. Insurance companies generally regard anyone under the age of 25 as a high-risk customer, chiefly because of the lack of driving experience and statistics showing that drivers in this age group are more likely to be involved in accidents. Despite this, there are several ways college students can lower the cost of insurance premiums.
Conversation with parents is essential when it comes to balancing the college budget, as parents are already familiar with the problems associated with finding affordable insurance coverage. The best way to learn about the different ways to minimize car insurance premiums for young drivers is to make a list and review it with family and insurance representatives.
Let’s look at some tips to lower college students auto insurance rates:
- Stay on The Parents’ Policy
Most likely, teenagers heading off to college are already being covered by their parent’s insurance policy. This is far cheaper than purchasing separate coverage for the youth, regardless of who owns the car being used by the student. If the parent has a good driving record and a long history of coverage with the same provider, adding a college student may result in only a 15-20 percent increase in monthly premiums.
This allows the student to pay the parent a small amount each and every month rather than pay a much larger premium directly to the provider. Talking with the family’s insurance company is the best course of action when adding a teen driver to the policy.
- Rewards for Academic Excellence
Before graduating high school, parents and their teens should check with the current provider concerning discounts for students heading to college. Many insurance companies offer a small discount if the student has been accepted into a major university, tech school, or community college. Insurance companies assume that a student with good grades is showing a measure of responsibility and is more likely to be a careful driver.
- Complete a Defensive Driving Course
These courses are often available at the student’s high school. If not, students can complete the driver education class in person or online. The cost is minimal and the insurance company will likely take the certificate of completion seriously.
The discount for students having completed a defensive driving course can be substantial, but this price cut is not offered by all providers. Some comparison shopping may be necessary for families seeking the best prices on student insurance, especially for those who have a certificate of completion in hand.
- Drive an Affordable, Safe Vehicle
Every college student dreams of arriving on campus in a shiny sports car. This dream is popped when the insurance rates are considered. A vehicle that is valued at less than $15,000 and has passed the crash tests with flying colors is the prudent option for those wishing to lower the insurance costs for college students.
This vehicle should also be covered on the parents’ insurance policy. It is always less expensive to add a vehicle to an existing policy than to insure it separately, especially if the student is still considered a dependent and is living at home part-time.
- Build Good Credit
High school and college students have several methods for building a good credit history. Individuals heading off to college should talk with their parents about opening a small line of credit or taking out a personal loan with a low-interest rate. If a new or used car is in the student’s name, making timely payments on the loan will result in a favorable credit score.
Good credit is essential because most insurance providers are now using this as a primary factor in determining the risk category. Many banks offer low-cost credit cards and student loans to individuals having been accepted into college. This is the perfect way to start building a favorable credit history and prepare yourself for even lower rates as you reach age 25.