Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 27, 2020

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Key takeaways...

  • When you’re in college, you can save money on your auto insurance by qualifying for a Good Student Discount
  • Getting good grades shows that you’re responsible and this will put you in a lower risk classification
  • When you graduate, you’ll lose your Good Student Discount but may receive a discount for being a graduate
  • If you start your career, it can change vehicle usage and will, in turn, change your insurance rates
  • You should assess your coverage limits and choose high enough limits to protect your assets when you finish school

When you graduate high school, you finally discover what it feels like to be an adult.

You may not be done with school, but you’ll enjoy a new-found freedom when you become a college student. You can come and go as you please and you have a say in what you want to study and when you want to attend school.

Not everyone who starts school will finish it.

In fact, the six-year graduation rate for first-time students pursuing a bachelor’s degree is 60 percent.

Some of the students who don’t graduate return to school and others pursue jobs that don’t require degrees.

Graduating obviously has an impact on your income, but it might also have an impact on things like your auto insurance.

Here’s what you need to know about insurance for college graduates.

Before that, if you just graduated from college and are in need of better auto insurance, start comparison shopping today by entering your ZIP code above!

Table of Contents

How does being a college student affect your insurance?

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When you enter college, you might notice your insurance rates change. It all depends on how old you were when you got your license, where you study if you drive your own car in college, and whether or not you buy your own policy.

No matter what applies to you, being in college can change your rates for the good or the bad.

If you stay on your parents’ insurance, you have the benefit of paying already lower rates because they have experience and an established driving history.

You may drive the rate up, but it’s still the cheapest option when you’re young, especially if you qualify for the Student Away discount or a multi-car discount. It’s always recommended to remain on your parents’ policy for as long as you can.

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Will you ever have to buy your own insurance when you’re in college?

There are different rules for different kinds of insurance. You may be able to stay on your parents’ medical insurance all through college, but that doesn’t mean that same rule applies for auto insurance.

There will be scenarios where you simply have to buy your own insurance, even before you’ve graduated.

One of these scenarios is when you’re not a dependent and you live outside of your parents’ home.

In this case, you’ll have to buy insurance in your name. If you just have a separate address at school but you still reside in your parents’ home permanently, you may still be eligible for combined coverage.

Either way, you can still qualify for discounts, but you should expect to pay more on a standalone policy.

Is age more important than your enrollment status?

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Being enrolled as a full-time student could make you eligible for Good Student and Student Away discounts, but it’s not just your enrollment status that has an effect on your premiums.

One of the reasons your rates are as high as they are is because of your age and your driving experience. Since you’re young when you first start college, you’re a much greater risk than when you graduate college.

It might feel like a discriminatory practice that carriers can use your age against you when you’re buying insurance, but in the eyes of the law, it isn’t.

Age and years of driving experience directly have an effect on claims trends. Drivers who are under 19 and have less than three years of experience will pay the highest rates out of all drivers.

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Will graduating college have a direct effect on your rates?

Your level of education only affects your rates with some insurance companies in some states, but it’s not always a rating factor.

In some cases, the insurer will ask if you’re a:

  • High school graduate
  • Current student
  • Associate’s degree holder
  • Bachelor’s degree holder
  • Or all of the above

Since higher levels of education indicate more responsibility, that sign of responsibility could help you save a small percentage off of your rate.

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Will there be any indirect effects on your rates after you graduate school?

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The biggest effects on auto insurance after you graduate are indirect.

Since earning a degree and becoming a professional will change your whole life, you need to know how these lifestyle changes will affect your insurance classification.

Let’s discuss the few ways your policy will change.

Vehicle Usage Changes

Your driving habits are extremely important to insurance companies. The company will ask you how you’re using your vehicle every term or periodically over the years.

Driving to school is classified the same as driving to work. This usage is classified as commuting.

If you take the bus to school or walk, it’s classified as pleasure.

If and when you find your dream job following graduation, you’ll need to make changes to your policy.

Not only do you need to let your insurer know your occupation, but you also need to update your usage if you’re now commuting or you’re driving your vehicle to multiple locations for business.

It’s always best to be honest, so your claims aren’t denied.

Annual Mileage Changes

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When your driving habits change your annual mileage will change as well.

When you’re working from home or your commute is shorter, your mileage will go down, therefore reducing your rates.

When you’re driving more to work or going all over the city on sales calls, your annual mileage will go up.

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Insurance Score Changes

Insurance scores are credit-based and affect your rates. There’s a good chance that your credit will change when you graduate.

Once you start to earn a stable income, you can build credit and a good credit score.

Building good credit, in turn, will improve your score and rating through your insurer so that you can lower your payments.

The best way to find auto insurance when you graduate college is to start comparing rates. As soon as you need your own insurance, you’re going to realize how big the expense can be.

Use an online comparison shopping tool to compare instant quotes today and find a deal now.

Try our FREE online quote tool and start comparing auto insurance rates today! Enter your ZIP code below to begin!

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