As a college student, you are always looking for options to save money. If you are a kid with a car, the petrol costs must already be burning a hole in your pocket. What is disheartening is that the car insurance premium for a student is higher than that of any adult older than a college student. Here are reasons why the premium of car insurance opted for by college students is higher.
Premiums of car insurance are determined based on a slew of factors which are not favorable to college students
- Younger individuals tend to cause more accidents than older people or more experienced drivers, hence age as a factor works against college students.
- The driving experience is an integral factor, college students are newbies and hence lack of driving experience drives up the premiums.
- No prior violations can contribute to lower car insurance premiums.
- The credibility of the individual will also determine the premium; a higher credit score will indicate that the insured can pay the insurance conveniently.
- The location where you reside could also determine the car insurance premium rates. Some regions prone to seasonal waterlogging issues, natural calamities, higher theft rates etc., will command a higher car insurance premium.
- Accident rates in the area will also determine the car insurance premium.
- Car usage is another factor which impacts the premium. Often college students tend to use their cars for long drives and do not practice good driving habits, these factors could potentially impact the car insurance premium.
- Interestingly even though gender can determine the premium rates, male drivers tend to be riskier and file more claims on their car insurance. Women drivers are less riskier and the claims against their car insurance are lower. This leads to male drivers having higher premiums.
Top 6 tips on how college students can lower their Car Insurance premium:
There are some hacks which can help college students to save on their car insurance. Here are a few of them:
- Avail student discounts:
Some car insurance companies offer discounts to students subject to certain predetermined criteria. You should compare vendors to ascertain if there are any such provisions.
- Good driving practices discounts:
As stated earlier, if you have a clean track record without any violations in the past, then it may result in lower premium charges. Typically, for a student this may not kick-in in the first year, however, with a no-claim track record, the student may build a reputation for good driving practices and this could result in lower premiums.
- Multiple policyholders:
If you hold multiple policies on you as a college student like home insurance, life insurance, and health insurance, then your premiums on car insurance could be competitive.
- Infrequent driver discount:
If you are a student who drives occasionally, then your premiums could cost you a lot lower. Here again, in the first year, you may not avail of this benefit, however, you can establish a pattern over a few years and show records of less than 25% utilization of the car’s mileage which will translate to a potential discount in insurance premiums.
- College Tie-Up:
Often insurers provide discounts when they tie-up with organizations and provide insurance to a group of individuals within the organization. An insurer may tie-up with your college/university to provide car insurance at competitive rates. For this, you may have to reach out to the college administration to find out if there is such a tie-up.
- Premium linked to IDV:
College students typically buy older or cheaper cars with lower IDV (Insured Declared Value). Thus, their car insurance premiums on old cars tend to be lower. This is because of the lower car value which will result in the insurance company making a smaller payout in the event of damage. The extent of coverage will be lower and hence the premiums would be lower.
For a first-timer college student, it could be overwhelming, so consult your parents and seek their help to choose the most competent car insurance.You can also reach out to Turtlemint Expert Advisors to help you with your car insurance!
This article is issued in the general public interest and is for educational purposes only. The blogs should not be used as a substitute for competent expert advice from a licensed professional to best suit your needs.