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- College-age drivers typically face higher insurance rates due to risk factors.
- Students who attend school 100+ miles from home may qualify for distance discounts.
- A good student discount can reduce premiums by about 12.5% on average.
- Keeping a student on a parent’s policy is often cheaper than a separate policy.
- Updating driver status when a student rarely drives can also reduce costs.
Why car insurance for college-age drivers is so expensive
Young drivers tend to pay higher car insurance premiums because they have less experience behind the wheel and insurers consider them higher risk.
That’s why parents often see premiums increase when a teen or young adult is added to their policy.
However, when a student goes to college, their driving habits often change — and that shift can create opportunities for savings.
“Insurance rates have been going up in a lot of areas over the last few years,” says Greg Martin, president of Think Safe Insurance in Brandon, Florida.” You want to make sure you have the proper coverage for your student driver, but you don’t want to overpay for insurance if there are savings you can take advantage of.”
When does your child going away to college reduce your insurance costs?
If a student moves away to school and drives less frequently, insurers may offer discounts that reflect the reduced risk.
Troy Harmon, owner/agent with Harmon Insurance in Coldwater, Michigan, says car insurance is typically among the top recurring expenses families face.
“But the good news is that when a college-age student moves to their school of choice and their access to insured vehicles changes, there could be an opportunity for your family to enjoy a rate reduction, although this may vary from carrier to carrier,” Harmon says.
Strategy 1: Student lives more than 100 miles away and leaves the car at home
If your child attends a school more than 100 miles away and does not take a vehicle to campus, you may qualify for a student-away-at-school discount, which can significantly reduce premiums.
“With this option, you don’t have to add and delete your child every time they return home,” Martin says.
Another option is to change your child’s driver status from a primary driver to an occasional driver, which may lower the premium if they rarely drive the family vehicle.
However, completely excluding a student from the policy can be risky.
“Some companies and some states allow a student to be excluded from coverage, but this is not recommended, as it would not provide coverage if the teen was home or driving a friend’s car while at school,” Martin says.
If you do temporarily remove your child from the policy, you can add them back when they return home.
“When your child returns home, a quick call to your insurance agent to reinstate coverage for the time they’ll be at home is all that’s needed,” Harmon says.
Strategy 2: Student lives nearby but leaves the car at home
If your child attends school within 100 miles of home and leaves their car behind, they may not qualify for a distance-based student discount. Still, there may be ways to reduce premiums.
“Your best option here is to contact your insurance agent and update your child’s usage information to make sure coverage for them reflects less driving because they are away at school,” Martin says.
Insurers may reduce premiums if a driver’s mileage and driving frequency decrease.
“But they may not allow you to exclude your child if they live less than 100 miles away, as they will likely assume that your child will be home more often,” Martin says.
Strategy 3: Student takes a car to campus
If your child brings a car to school, you typically won’t qualify for a “student away” discount, but the location where the vehicle is garaged may affect your rate.
“The ZIP code where the vehicle will be kept will increase or decrease your premium, depending on how the rates around the school are compared to your home address,” Martin says.
“Notify your insurance company that your teen will be taking the car to campus, and provide the address where your teen will be keeping the vehicle. If you live in a city and the campus is in a rural area, you may see a decrease.”
Insurers also need to know who the primary driver is.
“The policy needs to be rated correctly in the event of a claim, which is when you’re insurance company will start asking questions,” he says.
“This is when it is the most important to have a correctly rated policy, regardless of the premium paid. When something happens, the last thing you want is for them to deny a claim, which could be a devastating consequence.”
There may still be one advantage for students attending school full-time.
“Insurance companies assume that a full-time college student is less likely to drive as frequently as someone who works full-time,” says Rocky Dellamano, a financial representative for Country Financial in New Lenox, Illinois.
Strategy 4: Student lives at home and commutes
If your child lives at home and commutes to school, insurance costs may not change significantly.
However, reviewing the policy is still worthwhile.
“But it still pays to have a conversation with your insurance agent. Find out if the distance to the college is less than the distance your child used to drive to high school or work, for example. Remember that most auto policies are rated on usage and distance one-way to and from work or school,” Harmon says.
What are some other ways families can save on car insurance for college students?
Families may also reduce premiums through additional strategies.
For example, students with strong grades may qualify for a good student discount.
Parents may also consider adjusting coverage levels for older vehicles.
“If your child has an older car that’s garaged or only driven sporadically, you don’t need these types of coverage anyway. Put a portion of your premium savings into a repair fund each month if you’re concerned about what might happen when your student returns on break,” says Brian Martucci, the Minneapolis-based finance editor for Money Crashers.
Another option is increasing the deductible.
“Upping your deductible from $500 to $1,500 can reduce your annual premiums by three figures,” Martucci says.
Finally, keeping a student on a parent’s policy is often the most affordable choice.
“When a student looks at getting their own policy, they will usually lose many discounts their parents have – including discounts for multiple vehicles, multiple policies, longevity and established credit scores. That can cause premiums to increase dramatically,” Harmon says.
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Frequently Asked Questions: College drivers
Can I remove my child from my car insurance while they’re in college?
In some cases, yes — but insurers may still require coverage if the student occasionally drives the family vehicle.
Do students get car insurance discounts?
Many insurers offer discounts for good grades or for students who attend school far from home and do not keep a car on campus.
Does taking a car to college affect insurance rates?
Yes. The ZIP code where the car is garaged and how often it’s driven can affect premiums.
Is it cheaper to keep my child on my insurance policy?
Often, it is. Students who buy their own policies may lose multi-vehicle and other family discounts.
Can changing deductibles lower insurance costs?
Yes. Increasing deductibles can reduce premiums, although drivers will pay more out of pocket if they file a claim.
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