Q&A: Cheap Student Car Insurance
Age is only one of the factors used in calculating your insurance rates, but for young drivers, it's by far the biggest impediment to cheap student car insurance.
Age is only one of the factors used in calculating your insurance rates, but for young drivers, it’s by far the biggest impediment to cheap student car insurance. Young drivers have many times more accidents, and they are by nature more impetuous and immature.
Cheap student car insurance comes only when young drivers can prove they pose less risk to insurers. That’s where good student discounts and monitoring programs come into play.
While not every car insurance company offers a student discount or a usage-based program, a good many do. Their rules differ a little, but below are some guidelines as to what makes a student a “good student” and how an electronic monitoring program might cut your bill.
And while price seems to be the only thing that matters when you’re a struggling student, you may find that the very cheapest policies don’t cover what you assumed they would. Read the fine print.
Here are the most common questions we see as consumers search for cheap student car insurance:
What is a good student?
Each insurance company will have its own guidelines. Here is a sampling of their requirements. For a good student discount, you must:
- Be under age 25 and a full-time student maintaining a “B” average, or otherwise qualify as a “good student.”
- Be a full-time student in high school, college/university, or a certificate degree program.
- In schools where numbers are used to designate grades, maintain an average of at least 3.0 for all combined subjects.
- Be ranked scholastically among the upper 20 percent of your class.
- Be included on a school’s dean’s list, honor roll or comparable listing for scholastic achievement.
How much is a good student discount?
Every company will have its own guidelines on cheap student car insurance. Some will not offer a discount at all. Others will discount the premium by 10 percent to 15 percent.
Can I get a discount for taking a driver’s education class?
Yes, but not all insurance companies offer such a student discount, especially in states where all drivers are required to take a driver’s education class. When a discount is offered, it is typically for an accredited class. Some insurers require both classroom theory and on-road instruction, others do not. You can usually expect a break of 5 percent.
What is the cheapest student car insurance you can buy?
The cheapest student car insurance you can buy meets the letter of the law but doesn’t go a penny further. That means it meets your state’s requirements for bodily injury and property damage liability, paying up to those bare-minimum limits if you hit another car or injure someone. Your own car isn’t covered at all.
That may be enough for now, when you’re a starving student. But when you actually own something besides clothes, you place your assets in peril by having very low limits.
Some insurance companies can offer even cheaper rates–not by lowering limits, but by placing restrictions on the policy. Some may exclude all drivers except you, no exceptions. Some may not cover you behind the wheel of a borrowed or rented car. The restrictions mean less risk for them, thus lowering your rates.
How much can usage-based insurance save me?
A lot. Usage-based programs reward very careful drivers with discounts up to 50 percent. A monitoring device is placed in your car and transmits data back to the insurance company. The biggest discounts go to very cautious drivers. Cautious means you don’t drive a lot, or very fast. You don’t drive in the wee hours, and you don’t brake aggressively.
Can I save if I go away to college?
You can, but you have to go far enough. Most insurers ask that parents keep a child on the family policy if the school is within 100 miles of home; it’s too easy to return home for clean laundry, a decent meal and to borrow the family car. If you move across the country without a car, the student usually can be removed from the family policy. Your insurance company may ask that you add the student back during summer breaks and holidays.
I don’t have a car, but my roommates do. Do I need car insurance?
Your roommates should notify their own insurance companies that you are an occasional driver of your friends’ cars. If you live under the same roof, insurance companies assume you will be an occasional driver. If you’re not listed and have an accident, your roommates might have to retroactively pay premiums or face non-renewal.
If you wreck a roommate’s car, his or her insurance will pay out first. Once those limits are exceeded, you personally can be liable. You can buy what’s known as a named non-owners policy that would cover that liability, up to policy limits, for any car you drive.
A named non-owners policy would also start the clock running on your own insurance history, making a policy cheaper when you go to buy a car of your own.
I have a car. Should I let my roommates drive it?
Your insurance company assumes that any fellow students sharing your home will drive your car and wants them to be named on the policy, so it can adequately gauge how much risk they pose. If you don’t list your roommates and one wrecks your car, your insurer may ask you to repay premiums it would have charged with him on the policy, or it may choose not to renew your policy.