Insurance Tips

For college student drivers one of the most expensive costs of driving a car or truck is auto insurance. This is true whether you drive a car owned by your parents and insured under their policy or own and insure your own vehicle. Why are insurance rates so much higher for younger people?

The basic answer is simple: Insurance companies base their rates on the amount of risk a specific group of drivers have based on driving records, accident rates and the average cost of accidents. As a group college drivers are involved in more auto accidents, including fatal accidents. In fact, auto crashes are the leading cause of death for individuals ages 16-20. Limited driving experience, driver error, and other factors contribute to these higher accident rates. You can learn more about these factors in the joint study on younger drivers from the Insurance Institute for Highway Safety and the National Highway Traffic Safety Administration.

These tips may help younger drivers lower the cost of auto insurance.

  • Take a driver's education course. Many insurance companies discount rates for teens who have taken a qualified course. Check with your insurance agency to see if they offer such discounts and what courses qualify for the discounts. Some "defensive driving" courses may also qualify for discounts.
  • Maintain good grades. A number of insurance companies offer discounts for younger drivers who maintain at least a B average.
  • Maintain a good driving record. Having an accident or traffic violation can double and triple the cost of insurance. So drive safely and alertly. Don't engage in risky or aggressive driving such as speeding, tailgating, switching lanes quickly. Use your seatbelt. Keep your eyes and mind on the road, not on chatting with fellow passengers. If you need to use your cell phone, pull off to call.
  • Don't drink and drive. Not only is drinking before you're "of age" illegal, it's not smart. Drinking and driving at any age is stupidly dangerous. Alcohol plays a role in over half of fatal accidents involving younger drivers. A ticket for operating a car while under the influence of alcohol (DUI, DWI, OWI) can raise your insurance rates from 50% to 300%.
  • Drive a vehicle that is "insurance friendly." Avoid sporty, high performance vehicles-these have higher rates for drivers of all ages. Driving an older car with good safety features may save you hundreds, because the relatively lower value of the car can be insured for less and you may be able also to carry lower coverage for collision and comprehensive.
  • Compare policies and options carefully. Rates can vary significantly from company to company. In addition, you will want to consider whether it will cost less to be covered by your parents' policy or to have one of your own. Cars covered under a parental policy must be owned by the parents. Generally speaking coverage under a parental policy is cheaper than owning your own car outright and having a separate policy.

Read more on Auto Insurance:

Shopping for Auto Insurance from the Rocky Mountain Insurance Information Association provides tips, answers to such questions as "How Much Insurance do I Need?" and offers an Auto Insurance I.Q. Test.

Guide to Auto Insurance (teens) prepared by the State of Virginia has a lot of good general information plus some information that's specific to the State of Virginia.