Saving on Auto Insurance: Smart Money Strategies for Back to College Students

CHICAGO - It's that time of year again when college students all over the U.S. are heading to campus and checking their syllabi for the upcoming fall semester. As students transition back to school, this is a good opportunity to review their auto insurance coverage regardless of whether they will be bringing a car to campus, says the American Property Casualty Insurance Association (APCIA).

"Heading back to school can be an expensive transition, so every opportunity to save money can add up in a student's budget," says Bob Passmore, department vice president of personal lines at APCIA. "There are important details to consider in order to get the best deal on auto insurance."

If You Need a Car on Campus

The first issue to consider is whether you need a car on campus. If your college is in an urban area, access to public transportation means you can easily get to anywhere you want to go. In fact, many colleges offer free city transportation to their enrolled students. Even colleges in rural settings often have bus service available to students, especially large campuses with classroom buildings spread far apart.

"Students should check out the public transportation options at their university to decide if they want to take a vehicle to school or leave it home," added Passmore.

If You Leave Your Car at Home

Many insurance companies offer auto insurance discounts to students who attend college at least 100 miles away from home and decide not to bring their car to campus. If a student only drives a car when they visit home, they can be classified as an "occasional" driver on the auto insurance policy, which lowers their auto insurance costs. Remember, however, that living at home for the summer means more driving, and this change should be communicated with the insurer.

If You Are Taking a Car to an In-State University

If you live in a big city but your college is in a more rural area, you could see a reduction in your auto insurance because rural areas typically have fewer accidents and lower incidents of thefts and vandalism. Talk to your insurance professional about potential savings. Conversely, if you live in a rural area but are attending college in a big city, you want to be sure you have the appropriate amount of insurance protection to cover the increased risk.

If You Attend College Out of State

Each state has minimum automobile liability requirements for insurance and these requirements differ from state to state. Although most auto policies have language that allows them to conform to other states laws, talk to your insurance professional to find out what the requirements are and make sure you have the right amount of coverage.

Ask About Good Student Discounts

Insurers often give discounts for full-time students under the age of 25 who earn a B or higher on their academic accomplishments. Good students earn discounts because research has shown a strong correlation between good grades and responsible behaviors in other areas, such as driving. Be sure to ask your insurer or agent about a good student discount and check in with your insurance company every six months to let them know you remain a student in good academic standing to keep the discount.

Be Wary of Loaning Your Car to Classmates

Insurance is tied to the vehicle. When you loan someone your car, you are also loaning them your insurance. If the friend is involved in a crash with your car, your insurance costs can go up, so consider the risks before sharing your vehicle.

Learn More About the Factors Impacting Auto Insurance Costs

The cost of auto insurance is on the rise due to factors such as increases in the cost to repair and replace vehicles. Additionally, technological advancements in newer vehicles mean they are more expensive to repair with more parts required and higher labor costs involved to put them back on the road. A smart strategy for controlling the cost of insurance is to be actively engaged in managing your risks and to involve your insurance professional in seeking ways to manage rising costs.

For more information on why auto insurance costs are rising and how consumers can save money on auto insurance, click here.

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