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Car Insurance for College Grads

Important facts to know...
  • Finding the right auto insurance policy for your needs after you graduate college is a matter of evaluating the value of your vehicle and how you plan to use it
  • One of the best ways you can make sure that you get a reasonable rate on your auto insurance premium is to maintain a good credit score and driving record
  • While there are certain state minimums required for your car insurance policy, you may need additional coverage to secure your assets
  • The best way to start looking into car insurance rates for yourself is to compare various rates online for free

Whether or not you have a tuition bill to pay after graduating from college, any recent college graduate is likely looking for ways to minimize their expenses as they get a start on life.

While car insurance coverage is a necessary expense and part of owning and driving a car, you won’t necessarily be stuck with paying a high rate for coverage.

If you take the time to research your options for theĀ coverage that you need, you can make sure that you do not pay more than you have to for the required coverage.

If you have already been driving a car throughout college, then you most likely have existing car insurance coverage. Knowing your coverage status is a good place to start in evaluating your auto insurance policy options.

If you are a college graduate in need of affordable auto insurance, start comparison shopping today by entering your ZIP code above!

Why Auto Insurance Coverage is Important

Auto insurance coverage is required by state law for you to own a car or drive on public roads. The government wants to make sure that each driver is taking care of their financial responsibility to cover any damage that they may cause to another vehicle or person in an accident.

Different minimum levels of coverage are set by each state department of insurance. If you do not have at least the minimum amount of coverage, then you will be in violation of state law and are at risk of getting a ticket or even having your car impounded until you can show proof of adequate auto insurance coverage.

To comply with state law, you will need a basic auto liability policy. However, the state minimum is not enough to prevent you from having to dip into your own resources to pay for damage caused in an accident.

Even if you are just getting started in your professional life after college, you still have plenty to lose. A judgment against you for personal injuries that you caused in an auto accident can be executed against you at any time. So when you do start working at a professional job, your wages could be garnished to pay those accident-related expenses and penalties.

While it is true that younger drivers tend to have to pay more for their auto insurance coverage, you should do everything you can to get your rate as low as possible, including not having any lapse in your coverage.

If you go a certain period of time without maintaining auto insurance coverage, all of the auto insurance providers will be able to see this information on your driving record and can use it as a reason to charge you a higher premium for auto insurance coverage.

Tips on Choosing the Best Auto Insurance Company for You

You may currently have auto insurance coverage through your parents’ car insurance provider. Being on your parents’ policy could be a good situation for you because younger drivers tend to be charged more for auto insurance if they are not listed on someone else’s policy.

Some auto insurance companies will not allow you to stay on your parents’ auto insurance policy if you no longer reside at the same address as them. If you plan to move out on your own after graduating from college, then you should be prepared for the auto insurance company to require you to obtain your own policy.

If you are already getting renter’s or homeowner’s insurance, you can end up saving some money on your premium by getting your car insurance coverage through the same company.

Before you do this, you should make sure that you are satisfied with the service and rate you are currently getting from your insurance provider.

Friends and family are also excellent sources for referrals for auto insurance providers. Ask around and find out which companies have served other people in your same community well. Keep in mind that the same companies do not necessarily operate in every state.

Figuring Out the Amount and Types of Car Insurance Coverage that You Need

If you have an older car that you are not concerned about maintaining for very long at all, it may not make sense for you to have comprehensive and collision coverage. These coverages are optional and kick in to cover you if you sustain damage to your own vehicle that you caused.

If you are not concerned with having to replace your car after an unfortunate event, then you can save some money on your car insurance policy by skipping out on these coverages.

There is another option that allows you to maintain optional coverages and still reduce your monthly car insurance premium. You could keep those coverage plans and raise the amount of your deductible, which is the amount that you have to pay on your own when you file a claim for damage.

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If you have a higher deductible on your policy, then your premium will be reduced. Be careful not to request such a great increase in your deductible that you are not able to afford to have your car repaired if you do need to file a claim at some point.

If you are in the market for a new or used car, you may be required to have these coverages if you do not pay for the car outright. When you lease or finance a car from an auto dealership, you do not own the vehicle until the loan is entirely paid off.

If you lease a car, it is never technically owned by you even at the end of the lease. The dealer or the bank can stipulate that the car must be covered by optional coverages, such as collision and comprehensive. Ultimately, their asset will be taken care of no matter what happens.

Factors that Can Affect the Cost of Your Car Insurance Premium

There is no universal formula used by auto insurance companies to find out what your rate will be for your auto insurance policy. In fact, some factors out of your control–such as your gender or marital status–affect your car insurance premiums.

However, you can make sure that you obey all of the rules of the road and drive safely at all times to avoid getting a traffic citation or causing an auto accident.

Safe driving will help keep your driving record clean, which is one of the best ways to get a reasonable rate on your car insurance premium.

The same goes for your credit score. In general, drivers who have better credit scores get lower rates on their car insurance premiums because auto insurance companies assume that they will be more responsible policyholders.

The best things you can do to raise your credit score are to pay all of your bills on time and to try to eliminate credit card debt as quickly as possible.

How to Get Your Car Insurance Rate as Low as Possible Without Sacrificing Your Coverage Needs

After you have received a range of quotes for auto insurance rates, you should then check which discounts may be available to you.

For example, some auto insurance companies will give you a reduced rate on your premium if you can show that you only drive your car a certain number of miles a day. You would be at a lower risk of getting involved in an accident.

One way to accomplish this is to try to take public transportation to and from work each day.

Another possible discount for recent college graduates on their auto insurance premiums is a good driver discount. If you have not had any auto accidents or tickets on your record for the past few years, you could get an even better rate for your auto insurance premium if you go with a company that rewards clean driving records.

In general, three years of clean driving is a sufficient amount of time to be able to qualify for a good driver discount.

In addition to those discounts, you could also check into getting a slight rate reduction for completing a driver safety course.

Even though you may have had your driver’s license for a few years now, you are still considered a relatively new driver from the perspective of the auto insurance company. They want to reward you for taking positive steps to reducing your risk on the road by completing a defensive driving course.

With particular types of coverage, the auto insurance company will be on the hook for any damage to your car from vandals or theft of your vehicle.

Most car insurance providers are keen to offer a discount to drivers who have an anti-theft device in their cars. An anti-theft device will cut down on your risk of having your car broken into or stolen and takes some of the heat off of the auto insurance provider.

In recent years, more auto insurance providers have provided discounts or rate fluctuations for drivers who have a camera installed in their car or truck. The camera takes a snapshot of your driving habits, such as whether you slam on your brakes frequently or drive at a high rate of speed often.

Based on an average of your driving behaviors for a set time period, the auto insurance provider will either reward your safe driving with a lower rate or increase your rate to compensate for riskier decisions. Not all insurance companies offer this option, which is why it pays to ask around for what discounts might be available to you.

Some Final Thoughts

Having a car insurance policy is necessary if you plan to drive a car on public roads. If you go to purchase, finance, or lease your own car or truck, you will be required to show proof of auto insurance coverage just to be able to drive the vehicle off the lot.

To get the best car insurance coverage possible, you should spend some time comparing auto insurance rates. By comparing various rates online, you will be in a better position to make the right choice for the car insurance company that best fits your needs.

Make sure that you have enough coverage in case you are responsible for an auto accident at some point. That way you won’t have to pay as much out of your own pocket.

If your car is valuable, you may also want to consider more coverage so that you do not have to take care of damage you may cause to your vehicle.

Ask around for as many discounts as possible that can be applied to your policy to lower your premium.

If you graduated from college recently and are looking to save on auto insurance, start comparison shopping today! Enter your ZIP code below!

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