Student Car Insurance for Young Drivers

Guide to Student Car Insurance for Young Drivers

Do you attend high school or college—or do you have a school-aged dependent that’s recently obtained their driver’s license and is now looking for affordable car insurance?

Let’s be honest, for young drivers, car insurance rates will be higher than for those with more experience behind the wheel. Dealing with these higher premiums presents a big challenge to your budget, but you can find ways to save on car insurance if you’re willing to do your homework.

To help, we’ve collected information you’ll need to know about the ins and outs of vehicle coverage in this blog post. We hope you’ll find it useful.

How Does Student Car Insurance Work?

Car insurance for students works precisely the same as it does for more experienced drivers—except the rates are higher. However, there are some differences. For example, in many states, when a high school student earns their learner’s permit, they are automatically placed on their parents’ car insurance policy. In fact, even before students get their license, they must be added to the insurance as a nonchargeable excluded driver.

When you pay for insurance, here are the types of coverage you’ll be paying for:

  • Minimum Requirements. A minimum level of bodily injury and property damage liability insurance is mandated for all drivers in all states. With this insurance, the other driver’s repairs and medical expenses will be covered if you’re determined to be at fault. Conversely, if the other person is at fault, their liability coverage will pay your bills for injuries and vehicle damage.
  • Personal Injury Protection. Depending on your state, personal injury protection insurance (PIP) may be mandatory.  This coverage takes care of injury costs to drivers and passengers related to the accident, no matter who is the at-fault party. In some instances, PIP covers funeral costs.
  • Uninsured and Underinsured Coverage. Mandated in some states, this coverage protects you in accidents with underinsured or uninsured drivers. It covers a vast array of costs, such as repairs, medical bills and lost wages.
  • Collision and Comprehensive Coverage. Lenders require that you purchase collision and comprehensive insurance if you have a car loan on your vehicle.

Collision coverage bears the brunt of repair costs when you’re at fault for an accident. Comprehensive policies cover your vehicle during an incident other than a collision, such as when your car is stolen or damaged in a storm.

Who Is Considered a Student?

Anyone between the ages of 16 and 25 is considered a student by most insurance companies. Realistically, this age group includes drivers who need more driving experience to be considered trustworthy by insurers. Compared with older drivers, younger drivers are more likely to get into an accident and to file a claim. They offset these higher costs and risks by raising young driver rates.

What Type of Car Insurance Do Students Need?

As noted, younger drivers need coverage deemed mandatory in the state where they live. There’s no way around it. Driving uninsured comes with a long list of consequences that could affect your whole life.

In fact, purchasing only the bare minimum amount of insurance could also leave you in a compromising situation in the event you’re required to file a claim. That’s why you should carefully review the amount and type of coverage you purchase—your choices should speak to your needs as a driver.

One type of coverage you might consider doing without are those involving repair costs for accidents or breakdowns. Buying a new car is more expensive and not possible for most students, so a used car is a good, economical choice; hence, most students don’t drive new vehicles. Instead, they drive older or used cars. You should avoid paying for insurance that includes costly repair coverage since older automobiles often aren’t worth fixing. Check out how much you could save on premiums and consider whether it’s worth it.

If the insurance salesperson encourages you to purchase something you don’t need, focus on your budget. What can you afford? Decide whether it’s a sound decision to forego aspects of your coverage. Your choice should depend on what, where and how you drive.

How Much Does Student Car Insurance Cost?

Because there are many factors to consider, there is no general answer to this question. Depending on your state and how long you’ve been driving, your rate might differ. The kind of policy or coverage you choose will also determine the overall cost.

At the time of writing, high school students in the US were likely to see six-month premiums anywhere between $822 and $1,650. USAA provides the most favorable rates for teenagers at $822. However, not everyone can qualify with them, in which case experts suggest Nationwide Insurance at $1,062.

If you are a graduate student under the age of 25, you’ll find more favorable rates than your undergraduate or high school counterparts. USAA offers an average of $613 for a six-month premium. But if you don’t qualify for USAA, GEICO charges an average of $690 for the same period. 

Graduate students benefit from their higher education because insurers deem it a sign of stability.

Why Is First-Time Car Insurance So Expensive?

First-time car insurance is costly because the insurer is taking on a more substantial risk by covering younger drivers. Increasing the premiums is a way to offset the heightened chances for claims being made.

Proving yourself on the road to insurance companies means gaining driving experience without any at-fault accidents. As you get older, you’ll benefit from more attractive premiums that don’t chew into your budget as severely.

How To Get Cheap Car Insurance for Students

Right out of the gate, your best bet for finding more affordable car insurance is through doing some research. The internet is a vast and magnificent source of information to compare auto insurance rates simply by pressing a few keys.

However, your efforts to save money shouldn’t end online. There are indeed other ways to save money on your premiums.

First, you can earn a defensive driver discount by taking certified courses that prove your skills on the road to insurers. Next, insurers generally reward students with a 3.0-plus GPA with reduced rates. Why? Insurers accept that good students tend to make better decisions while on the road; moreover, good students are deemed all around more responsible than students with lower grade point averages. Keep in mind that they’ll want proof and ask for a copy of your transcripts every six months.

Together, the good student discount and defensive driver discount can knock off more than $300 from your overall costs.

Another strategy that will pay dividends for high school and college students living at home is staying on their parents’ policy. Since your parents likely have a reliable driving history, this should result in a reduced rate.

Lastly, there’s now an insurance alternative known as telematics. By analyzing your driving habits and reporting them back to your insurer, this tool helps young drivers—who are safe on the road—earn discounts.

Telematics works via a smartphone app or plug-in device. Behaviors such as speed and hard braking are monitored on top of your overall mileage. When plans are usage-oriented, it bases your premium on the number of miles you drive. Those who drive less save more.

Here are some of companies that offer telematics (by no means an exhaustive list):

  •       Allstate
  •       State Farm
  •       GEICO
  •       Progressive
  •       Root
  •       Metro mile


Like everything in life, purchasing car insurance becomes less stressful when you take the time to research the topic.

Yes, it’s a significant expense that can’t be avoided—unless you live in a city with great public transportation. However, that doesn’t mean you should dread the process. After all, insurance covers you during disastrous circumstances, and anything that provides peace of mind is worth the cost.