If there is one class of people who need to save the most, it is college students. Expensive tuition fees increased the cost of living, and eating plain boiled spaghetti every day is bad enough for them. If you are a college student with a car to meet your commuting needs, the rising cost of gas is already a burden. Who would want to add the burden of expensive car insurance policies?
Auto insurance policies such as liability insurance, personal injury protection plan, uninsured motorist coverage, etc can be mandatory depending on the state you live in. Mandatory coverage is necessary to have, and getting all these policies along with some important optional auto insurance coverage can increase the cost of your car insurance expenditure.
So to help you save a lot of money on auto insurance policies without sacrificing your auto insurance coverage, here are some tips specifically for college students. Follow these tips and you could save thousands of dollars every year.
Select the Best Policy, at the Best Price
Car insurance policies can get very expensive, but it does not have to. You might have heard of the myth that says it has to be expensive for it to be good. That’s not true. You can get a great car insurance company with great coverage options at very low prices. All you have to do is look for different options, compare what they are offering, and select the one that comes at the lowest price and offers the best coverage.
Since your car insurance needs and rates depend on the state you live in, find out the best car insurance company in your state, compare all the options you have online, and then make the purchase. For example, if you live in California, then look for the best California insurance companies and their prices for the policies. Also, take note of their customer service quality and claim processing time.
Ditch Some Policies
Liability insurance is necessary for almost every state in the US. So except for the people of New Hampshire, you are legally required to buy liability insurance to drive a car legally. But there’s more. Depending on the state you live in, you might be needed to get two more policies.
12 states in the US are called the “no-fault” states and if you live in any of these, you are required to have a personal injury protection plan. 14 states require you to carry uninsured motorist coverage too. Since these policies are mandatory, there’s no escape from them other than choosing the most affordable options.
But you can easily skip some optional coverage if you do not need them. For example, two of the most popular coverage options are collision coverage and comprehensive coverage which can cost you a pretty penny and even be useless if you do not need them. So when do you need them and when should you avoid getting these coverages?
For collision coverage, the best way to figure out if you need it or not is by looking at your car. If you drive a brand new, or fairly new car that costs you a good amount of money and fixing it might get you a long bill, then collision coverage is worth keeping. People who drive SUVs, sedans, and electric cars such as Tesla, etc should buy collision coverage.
But if you have a second-hand, old car that your grandma used to drive and it is over 8 to 10 years old, do you think that paying hundreds of dollars if not thousands to have collision coverage for it is worth it? It is better to skip collision damage waiver for old cars and save yourself a lot of money.
In case you get in a car accident, just pay for the repairs from your pocket at the lowest rates. That’s the great thing about fixing cheap cars; it’s cheap and can be done anywhere.
Coming to comprehensive insurance, this policy covers the cost of car repairs for all the damages it might sustain while being parked. If you live in an unsafe neighborhood with a high rate of theft or live in a state where hurricanes or floods are common, then comprehensive coverage is worth it. It covers damages due to natural disasters, theft, riots, animal damage, projectile damage, etc.
But if your car is very old, or you keep it in a covered, locked garage and the risk of a natural disaster is not worth hundreds of dollars, then skip comprehensive coverage. Comprehensive coverage is usually not that expensive, especially if you live in a place where the rate of theft is low. But if you don’t need it, then every penny in your savings counts.
Consider Usage-Based Insurance and Discounts
If your monthly mileage is low and you occasionally drive, then having general insurance can be a mistake. It is much better to switch to a usage-based or pay-per-mile car insurance policy where you have to pay according to your mileage. The less you drive, the less you pay.
But before you switch to usage-based auto insurance, make sure that your yearly or monthly mileage is not that high. The best way to check this would be by contacting insurance agents or companies and getting a quote for your base rate for insurance. This base rate will be multiplied by your mileage to determine your monthly insurance cost.
Check your monthly mileage, get the quote, and calculate the rates yourself. If the price is more than what you are paying for general insurance, then skip it.
Many auto insurance companies also offer great discounts for good students with good GPAs. Contact your insurance agent and find out about all the great discount options your auto insurance company offers. It can help you save a lot of money.