Being young comes at a premium price when it comes to auto insurance. Insurance companies view young people under 25 as a high risk for making claims. It’s not that they hate you. They have factual statistics to back it up. Teenage and college aged individuals are the most likely age group to get into an accident. Some of it is due to inexperience driving, making poor decisions, and reckless driving. But, this doesn’t mean that every college student is a bad driver. In fact, the vast majority of you are very responsible drivers. Here’s a look at five tips to help you get better rates on your car insurance premiums.

1. Choose a higher deductible. For collision and comprehensive coverage, choose $500 or $1000 for your deductible, but make sure that you stash enough cash away in an emergency fund to cover your deductible if you do get in an accident.




2. Choose a safe car to drive. You can’t get around the fact that an insurance company will give you high rates based on your age. But, you can control what type of car you drive. Typically, a 4-door sedan with high safety ratings will yield lower premium rates than a sports car or SUV. I know, the Honda Accord doesn’t get the chicks, but the money you’ll save on insurance premiums can go towards money for dates.




3. Skip on collision coverage. Most young people drive clunkers. I drove a 1987 reddish-pink Nissan Sentra for two years. It was worth about $1,000. A friend of mine drove a $2,000 Pontiac Firebird for a year. If you have a clunker, you probably don’t need to pay for collision. Any car with a book value of less than $3,000 warrants skipping out on collision. The amount you’d spend on the premium could be saved every month and pay for another clunker.




4. Get good grades. Most auto insurance companies will give you a 10% to 15% discount on your auto insurance premium for having good grades. A 3.0 GPA or higher is usually the standard for receiving the discount.




5. Buy another policy with the same carrier. Many insurance companies will give you a discount for having multiple policies with them. I recommend coupling your auto insurance with renter’s insurance. Most college students don’t buy renter’s insurance. It will protect your personal property in an apartment from theft, vandalism, fire, water damage, and many other perils that can destroy your stuff. The best part is that you can pick up a $20,000 policy for $10 to $15 dollars a month.

Search Online Insurance Quotes
The web makes it easy to shop around for coverage. Here are a few places you can get insurance quotes online so you can compare their rates right away:

Saving money is a learned habit. You’re not born with the gift of knowing how to save money. If you develop this habit throughout your college years, you will be very successful with your money. You will typically spend 10% to 15% of your monthly income on insurance premiums in your lifetime. It’s worth it to put the effort into saving money on your premiums.

Some of the earlier articles in this series cover the best checking account for college students, how you can make extra money in college, and the best student credit cards.

Stay tuned for tomorrow when we’ll cover saving money with student discounts.

These tips for saving money on auto insurance for college students is part of the College Student Money Guide.

1) Do I need a doctor’s physical before getting a life insurance policy?
Yes, some insurance companies will send someone to your home to perform the checkup at your convenience.

2) How do I know what amount of life insurance is right for me?
The insurance company looks at your assets, liabilities, and dependents and recommends how much insurance you need.

3) I’m young and healthy. Why should I buy life insurance?
The answer to this one was to plan ahead. Whether you qualify and how much you pay for life insurance depends on factors such as your health, age, occupation, and others. His argument was that 15 – 20 years from now you may find yourself in a much more expensive category or even uninsurable so you should lock in your insurance rates now.

4) I have a life insurance policy from my employer. Isn’t that enough?
He recommended against relying wholly on my employer for coverage. If a person wants coverage their company doesn’t offer, moves to a new job that doesn’t have the coverage they need, or wants to start their own company then having a separate life insurance policy would fill those gaps.

5) Wouldn’t I be better off investing the money I’d otherwise spend on insurance premiums?
He gave a pretty simple answer to this one. You could just put the money in the stock market but there is more risk using this approach. You could lose all your money in the stock market but the coverage provided by the life insurance policy is guaranteed.

6) Can children be named as beneficiaries of a life insurance policy?
Yes, but he stressed that it should be done through a will. The legal documents should appoint an executor to manage the money and a guardian to take care of the kids.

7) Why should I care if a company charges sales commission?
This one is pretty obvious but I asked it anyways because it was on the list. Sales commission will make your premiums higher. If you have a policy that builds value over time it will take longer to accumulate money

Should I buy life insurance on my children?
People do this for two reasons. The first is to help through a transitional stage in the horrible event you do lose a child. The second is to lock in life insurance at a low rate for your kids.

Of course the insurance agent ended by asking if I was ready to start the application process for a life insurance policy. I thanked him for his time and said I’d look into it. Now that I’ve heard the answers from the insurance company’s point of view my next step will be to go to an independent third party to research them farther. I’ll let you know what I find out. Do you disagree or find fault with any of their answers?