How to Choose the Best Auto Insurance as a Recent College Grad

Bad news for recent college grads: According to the U.S. Bureau of Labor Statistics, the cost of car insurance has increased by 22% on average over the last 12 months. What once cost $200 per month is now $244. A big increase, especially for young buyers.

Young drivers pay the most. The typical 18-year-old pays twice as much as the typical 35-year-old — rate comparisons are brutal (look at your peril). But college grads have some tools they can use to keep prices affordable without sacrificing good insurance.

How to choose the best auto insurance

If you’re a recent college grad, you shop for auto insurance like anyone else. Start by checking how much insurance you need. Then, call insurance companies for quotes. Finally, compare prices and features, balancing affordability with a high-quality claims experience.

When you’re a recent college grad, you’re likely to be under 30. Your rates are probably higher than the national average, and you may be graduating with debt as a result of your education. You probably want to start with the most affordable auto insurance companies and go from there.

When I first shopped for auto insurance, I did so online. It’s fast and convenient. You can pull online quotes from many insurers, including the big ones that frequent our TV commercials. But not all insurers offer online quotes — you may need to call to ask about coverage.

What you need when pulling quotes

When asking for quotes, you’ll need the following on hand:

Read more: check out our picks for the best car insurance companies

  • License plate number
  • Car details
  • Driver’s license info

You’ll also want a general idea of what you’re looking for. Not sure where to start? Chances are you need liability insurance, plus enough coverage to cover the most likely bad scenarios.

Drivers need liability insurance

Most states require drivers to have liability insurance. Liability insurance covers damage to the other driver and property when you’re found to be responsible for an accident.

Liability insurance minimums vary by state. Most ask for $25,000 in bodily injury per person, $50,000 in bodily injury per accident, and $10,000 in property damage liability per crash.

You’ll probably want more than liability insurance coverage, the bare minimum. In that case, drivers can add comprehensive or collision coverage to your policy.

Optional: comprehensive or collision coverage

Comprehensive and collision coverage are add-ons, typically optional. Comprehensive insurance covers you if someone steals or vandalizes your car, among other perils. Collision coverage prevents you from paying for property damage, including damage to your vehicle.

There’s more to insurance than that. In short, neither collision nor comprehensive coverage will cover everything, even if you buy both. Prioritize the situations you’re most likely to find yourself in. Poor drivers in your area? Get collision. Lots of theft? Buy comprehensive. I’m simplifying, but you get the gist. You can even buy more minor add-ons, like gap coverage.

Once you’ve got a general idea of what type of car insurance you want, you can contact insurers for specific quotes. College grads should look out for a few discounts.

Discounts for college grads

Many insurers let you bundle drivers (multi-car) or insurance types (multi-policy) for discounts in the 5%-10% range. If you live with parents or sibling drivers, it’s worth checking if you can bundle your insurance together. You could easily save over $100 per year.

College grads may qualify for low mileage discounts and safe driving discounts. You can snag multiple discounts, stacking your savings.

There’s more to the best car insurance than low prices, but college grads have priorities, and that’s typically affordability. Your car insurer should offer the basics: prices that fit your budget, coverage for what you want most, and a simple way to file claims.

Our best car insurance companies for 2024

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we’ve researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.

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