Best Car Insurance for College Students Of 2023
Car driving in college is more of a thrilling and exciting experience. It is essential for college students owning their car to have their insurance policy in place.
However, if you’re under the age of 25 years, then you are supposed to shell out more for premium than your adult counterparts. As when you are a college student and young in age, insurance companies put you in a higher risk bracket as young people tend to drive rashly and are more prone to accidents and collisions as compared to the adults and thus charged more premium.
In India, there are no such special discounts or rebates given to college students for buying a car insurance policy, but surely there are several other ways which can help college students to get a car insurance policy at much better rates.
Forbes Advisor India has prepared a list of best insurance companies which are providing low-cost premiums to college students or young drivers not directly but on the basis of other ways. And, also prepared a detailed guide which assists college students in purchasing an insurance policy for their beast.
Methodology
We analyzed the best insurance companies for college students on the basis of several factors, such as:
Car Insurance Discounts (30% of the score): These are the kind of direct discount which college students might receive such as online discount, no claim bonus discount and multi-year discount policy, multi-vehicle discounts, which can further drive down rates.
Fully or Semi Digitized Process (20% of the score): Digitized and paperless process makes it easy for young and hi-tech college students to apply for policy issuance, renewals and ensures smooth settlement for claims.
Pay As You Drive (PAYD) (30% of the score): This is relatively a new kind of discount which is only offered by a few insurance companies in India. It is entirely based on how many kilometers you plan to drive in a given timeframe.
Voluntary Deductibles (10% of the score): It is that portion of the claim which the policyholder agrees to pay out of their own pocket, and thus it leads to a heavy discount in premium.
Cashless Garages (10% of the score): The better the tie-up insurance companies have with these garages, the more it assures the chances of having a cashless claim settlement in the time of contingencies which makes it super easy for college students.
Tips to Reduce Car Insurance Premium Cost for College Students
In India, there are no direct discounts and subsidies available to college students for purchasing a car insurance policy like the way it is given in the western part of the world.
Rahul M Mishra, co-founder and director, Policy Ensure, said, “for students/college students, discounts are currently not available. Though as tech is being incorporated based on usage, running Kms/per month, some of the companies are giving discounts”.
Below mentioned are the certain ways via which college students or young drivers can reduce the burden of premium cost up to a certain level.
Type of coverage purchased: The premium cost totally depends upon the kind of coverage that college students might apply for. For instance, the cost of the third-party insurance policy is quite low and starts from INR 2094 per annum. But the premium cost for a comprehensive plan is higher because it provides extensive coverage.
Location: If the college student drives in small or tier-2 and tier-3 cities, then the premium cost would be much lower as compared to cost associated with metros and tier-1 cities.
Age: Age of car owner is also an important component which helps in deriving the premium cost of the vehicle. Younger drivers tend to pay more as they have been statistically proven to be more prone to road accidents. But as your age starts approaching 24 or 25 years or beyond that, rates start to get low, assuming they have a great record of driving.
Kinds of Discounts Available: The premium cost also get decreased if the insurance company offers various discounts such as on online purchase, professional discounts, usage-based discounts, multi-year discounts or no claim bonus.
Voluntary Deductibles: If the policyholder opts for a higher deductible, then it automatically reduces the cost of premium charged.
Automobile Association Discount: If you are a member in any of the listed five automobile associations in India, then the insurance company will extend you a discount which might go up to the 5% of the total premium cost.
Pay As You Drive: PAYD, has become one of the most trending and useful add-on features in car insurance, which can prove ultra-beneficial to college students as their driving demand is quite limited as compared to their older counterparts. In the PAYD feature, the policyholder has to shell out from the premium depending upon the kilometers which they drive. The lesser the kilometers driven; the premium cost gets reduced in the same proportion.
Above mentioned are a few smart ways to reduce car insurance premiums which can definitely help college students in bringing down the premium cost.
Rakesh Jain, CEO of Reliance General Insurance, believes ” Keep a clean slate and get rewarded with a No Claim Bonus. With no previous claims, you can save up to 50% on your Own-Damage premium. Choose the voluntary deductible feature and pay a small amount during a claim to enjoy lower premiums and higher discounts. Just remember to pay the deductible upfront before the insurer settles the rest”.
What Do You Mean By Pay As You Drive (PAYD)?
“Pay As You Drive” or PAYD is a recently launched tech-enabled add-on cover which provides a discount up to 25% on the payable premium of own damage cover. This means you are no longer liable to pay a fixed premium on your car insurance policy, rather you pay a premium on the basis of the usage of the car.
The coverage of PAYD cover is quite similar to regular insurance coverage. However, here to get the benefits, the policyholder needs to declare the exact usage of the car in a given policy year. And based on the kilometers covered, the insurance company will provide the discount on the own damage premium. The policyholder can easily customize the insurance cover by choosing optional add-on covers.
It can be opted by any individual who drives less than an average of 10,000 kilometers in a year. Under this cover, the policyholder is eligible to receive a discount of up to 25%, subjected to the annual kilometer slab opted for an odometer reading.
Benefits of Pay As You Drive (PAYD)
| Mileage | Discount on OD Premium |
|---|---|
| 0-2,500 kms | 25% |
| 2,501-5,000 kms | 17.50% |
| 5,001-7,500 kms | 10% |
| 7,501-10,000 kms | 5% |
| >Above 10,000 kms | 0% |
Other benefits of PAYD for college students:
- Claim benefit up to 25%.
- No pre-condition or limit on kilometers.
- No extra changes even if the student drives extra kilometers.
The insurance industry also expects PAYD to be a game changer as it totally depends on usage-based costing which ensures full transparency and is not that heavy on the pocket of college students.
On the launch of PAYD in one of the leading insurance providers National India Assurance, Neerja Kapur, chairman and managing director, said, “PAYD policy fulfills a long-standing demand of customers for simple and flexible products that consider different usage patterns. This product is one of the few in the market to help the customer manage his outflows towards vehicle maintenance. We are confident that this product will herald a new age in vehicle insurance and promote better compliance thereby reducing the risks associated with uninsured and underinsured vehicles plying on the roads.”
Why do College Students Have a Higher Accident Risk?
Road accidents is a global issue which should be considered as a serious concern as statistically it has been researched that the majority of road traffic accidents are caused by the younger generation. Let’s see the main reason why college students have a higher risk of causing accidents:
- Lack of car driving experience.
- Overconfidence while driving.
- Poor estimation of risk.
- Peer pressure from co-passengers.
- Parental influence.
- Driving under the influence of drugs and alcohol.
- Involved in the cases of hit and run.
How College Students Can Buy a Car Insurance Policy?
- Visit the official website of the insurance company and click on ‘buy motor insurance”.
- Fill in your personal information such as age, location, profession and contact information.
- Click on what type of coverage you want to select such as third-party policy or comprehensive policy.
- If you select a comprehensive car insurance policy, then you can also select add-on covers along with the policy at an extra premium cost.
- Once you select, the premium quote will appear in front of you. At this stage, you can compare different policies and find out the best rates.
- Once you are ok with the premium cost, go ahead to buy the policy and make the payment via bank transfers or other online modes.
- After the payment, the soft copy of your car insurance policy will be mailed to you at your registered id. These days insurance companies also send the soft copy via WhatsApp.
What Factors Should College Students Consider While Buying A Car Insurance Policy?
- Conduct a proper research about various car insurance plans, coverage and different add-on riders which meet all your needs.
- Go through the online feedback and reviews which are easily available on the internet.
- Always compare premium quotes for various insurance plans and select the most appropriate one which is extensive in coverage and best suited to your pocket as well.
- Go for a comprehensive kind of coverage as it will help you more at the time of unexpected situations.
- Be judicious while purchasing add-on covers and choose only those that fulfill your insurance requirements. For instance, nil depreciation cover can be a perfect choice for a college student driver.
- Carefully read the fine prints of the policy which includes all the possible inclusions and exclusions.
