Car insurance 101 for college students

There's no question that heading to college or university is a big step.

As you prepare for the transition, you may wonder how car insurance works while in college. Can you stay on your parents' policy? What happens if you're attending an out-of-state school? How can you get the best rate on car insurance or earn discounts?

We've got you covered. Here are the basics of what college students need to know about car insurance.

Can I stay on my parents' car insurance policy?

Most states and insurance providers will allow you to stay on your parents' policy, even if you go to an out-of-state school, as long as your parents' address is still listed as your primary residence. But some states and insurers don't allow out-of-state students to stay on a parents' policy.

There are benefits to staying on a parents' policy. It's typically more convenient and less expensive, especially if you're sharing cars with family members and living at home during school breaks.

But there are drawbacks that are important to consider. If you were at fault in an accident, your parents' policy covers the claim and any potential legal issues that could come from it. By remaining on your parents' policy, they're still liable for your driving.

To find out whether you're eligible to stay on your parents' policy while living out of state, talk to your insurance provider. You'll need to provide some information, including:

• Whether you're taking a car to school.
• Who owns the car.
• Whether you're living on or off campus.
• ZIP code where the car will be garaged, or parked overnight.

Since there are many factors that influence auto insurance rates, you may still want to get a quote for a separate policy, even if you're eligible to stay on your parents'. For example, it may be more affordable to get your own insurance if your car is garaged in a more affordable ZIP code, or if your parents have tickets or accidents on their records.

What if the car is in my name?

Some states require the name on your vehicle registration and auto insurance policies to match. That means if the car is registered in your name, you'll need your own auto policy as well. But in most states, as long as your car is garaged at your parents' address, you may be able to stay on their policy.

What if I drive my parents' car?

Some insurance policies will cover your parents' vehicle if you borrow it in an emergency or on a one-time basis. But if you regularly drive a parents' car, you should be listed on their auto insurance — whether you live with them or not.

How much does car insurance cost for college students?

As a college student, you'll typically pay more for car insurance than adults older than 25. Why? Because teenagers and young adults have less driving experience and tend to be riskier drivers. Staying on your parents' policy, if possible, is usually the best way to keep insurance costs low.

Car insurance discounts for college students

Going to college is exciting, but it can also be expensive. Fortunately, many insurance providers also offer discounts for college students (and their parents), which can improve your rate. You may be eligible for a discount if:

• You maintain good grades. If you meet your insurer's requirements and complete an application, you can receive a discount for academic performance.
• Your car has improved safety features or an anti-theft device. These technologies can reduce the likelihood or size of any claims, so you may get a discount.
• You keep a clean driving record. Most insurers will give you a safe driver discount when you stay claim-free.
• You take a driving course. Your insurer might offer big discounts if you pass an approved defensive-driving course.
• You drive infrequently. You can often get a discount for driving less, based on miles per year.
• You stay with your parents' insurer. Some companies, like USAA, offer family discounts, so even if you have to buy your own policy, you may be able to still save.^{See note1}
• You park in a garage. Because garage parking usually offers greater protection from the elements, theft, vandalism and accidents, many insurance companies offer a small discount.

You can also receive discounts for having multiple vehicles on your auto policy, or if you have homeowners or renters insurance in addition to your auto insurance, you might be able to get a discount by bundling them.

Other ways to save money on car insurance

To lower your premium, you can make changes to your coverage or your vehicle. There are four other ways to lower your auto insurance rate.

1. Raise your deductible.

Your deductible is what you'll pay out of pocket before your insurance kicks in. If you're comfortable with a higher deductible, you may lower your premium. You'll have greater savings with some vehicles, so compare costs. It may not make sense to save only a few dollars a month if it increases your deductible significantly.

Whichever you choose, you should always make sure you have enough money set aside to cover your deductible in your emergency fund.

2. Reduce or drop collision and comprehensive coverage.

If you're driving an older, low-value car, you may want to reduce or eliminate your coverage for physical damage. Consider how much your car is worth, and make sure if you need to replace it you can afford it.

3. Choose the right vehicle.

Your car's make and model can impact your premium. Cars with a better safety record and lower repair costs typically have a lower premium.

Also consider the likelihood of theft. A flashy car might be fun, but it can increase your insurance premium.

Car insurance is an important must-have when heading to school. With the right policy, you'll get the coverage you need at a cost that makes the grade.