Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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It’s all about you. We want to help you make the right coverage choices.

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Here's what you need to know...

  • Choosing car insurance is never easy
  • You need to shop and compare the different kinds of coverage to see what offers you the best deal
  • You should balance what you can afford to pay with your needs and level of risk
  • You may qualify for certain discounts after graduation

Are you a recent college graduate looking for car insurance? Have you thought about what kind of car insurance you’ll need to feel secure on the road? Buying insurance can be a confusing ordeal, especially when you are right out of college.

In this article, we will look at some of the coverages required to be compliant with the law as well as some of the other supplemental coverage areas you may want to consider.

Remember that just because they are offered does not mean you have to take them. but it gives you a starting place while shopping for insurance so that you can find the coverage that best suits your needs.

Enter your zip code below to access car insurance rates from the top companies in your area!

Table of Contents

Minimum Car Insurance Requirements

The first thing you need to do is to make sure that you have the mandatory coverage amounts required in your home state.

To find out what your mandatory amounts are, go to this state map that covers the various insurance laws and regulatory mandate for insurance in the respective states.

The general mandatory insurance requirement usually runs from $25,000-$50,000 per person for bodily injury liability coverage, around $25,000 per accident for personal injury liability, and $10,000-$15,000 for property damage liability.

These are just estimates and averages, of course, and this varies from state to state.

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Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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Optional Insurance Coverage

There are some other optional coverage areas that you can add to your car insurance policy if you choose to. Some of the most common extra coverage areas are listed below with their descriptions.

Uninsured/underinsured

Uninsured and underinsured insurance is meant to cover expenses that the other driver cannot cover due to being underinsured or not insured at all.

This insurance would only need to kick in when the other driver was ruled at fault and when they did not have sufficient insurance to pay for damages.

This extra coverage is required in some states but not in others. Either way, it is a great coverage to have because it will cover your loss when the other guy’s insurance does not.

Medical payments or personal injury protection (PIP)

Medical payments are an optional insurance payment that pays for medical expenses or injuries to you or your passengers.

It is sometimes required but not always. It is considered duplicate medical insurance by some because it only goes to medical bills, but it can certainly come in handy if you discover you have more significant injuries than you thought or have to have ongoing treatments.

Collision

Collision insurance is meant to cover damage to your vehicle that is due to your own negligence or fault.

Remember the other driver’s insurance will be used when they were ruled at fault, but you can use collision insurance when the accident is your fault.

Deductibles are included within collision coverage so you should make your deductible no more than you can afford to pay out-of-pocket in the event of a collision.

Comprehensive

Comprehensive insurance covers many things that are not covered by auto insurance. Remember that theft, vandalism, acts of nature and hail are all examples of factors that are not covered by your normal insurance coverage.

Glass coverage

Another smaller coverage that many people do not think about getting is glass coverage. Windshield replacement can cost anywhere around $200 or more. If you live in a storm or flood area or are on the road every day, you may want to consider this optional coverage.

Gap insurance

If you are leasing a car, you may want to invest in temporary gap insurance.

This is insurance that is meant only to last around 28 days for a car that is leased to you while you are waiting to get your car. It only covers the difference between the street value of your car and the amount of the lease. It is not meant to be permanent insurance.

Discounts for College Graduates

Now that you know some of the kinds of coverage you’ll need to look for, you’ll also want to think about the kinds of discounts you may qualify for.

New college graduates, depending on your situation, may qualify for a variety of discounts.

  • Good driver discount – If you have a great driving record, you may qualify for a discount on your car insurance premium.
  • Good student discount If you plan to continue your education to the next level and enroll in graduate school, or if you are still a student on any level or in any training school, you will likely qualify for this discount if your insurance company offers it.
  • Military discount If you plan to go into the military right after school, why not ask about a military discount. Almost all insurance companies offer some military discount for anyone who is either active or inactive duty.
  • Civic Society discount Some insurance companies offer discounts for being involved in a civic organization.
  • Government employee discountIf you work in any job that is considered a local, state, or federal government position, you may qualify for a discount in this area. Teachers, police officers, and firemen are some examples. Ask your insurance company when you apply.

Who has the best insurance?

In the end, you need to focus on finding the best insurance company for you and your needs. Always balance the amount you are going to pay out in premiums each month with the amount of risk you take on an average basis.

If you drive daily, for example, and drive a long way to work, your risk will be substantially greater than if you work at home.

If you carpool with other people, your risk may be higher since you are carrying other passengers with you, but lower because you will sometimes not be driving.

Think about your normal routine and how much in harm’s way you and your car will be and base your choice of insurance on the level of risk.

Think about your driving habits. Are you easily distracted? Do you have to drive through busy traffic on an almost daily basis? If you have to drive through busy traffic in the city during rush hour, your risk goes up more.

Distance traveled is a key factor in an insurance company’s decision on what to charge you, as is your driving record, age, and job status.

Everything counts when it comes to figuring your premium. So the best thing you can do is to be a good drive, be a good citizen, and drive defensively.

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Shop and Compare to Find the Best Rates

When you are shopping for your car insurance, look for the insurance company that is going to give you the attention to detail that you need and explain the fine print.

It’s not enough to just get a good policy. Find someone who will answer your questions and who will take the time to get to know your situation.

Then choose based on your individual budget and needs. Remember the only thing worse than too little insurance is no insurance. Don’t risk the huge fines and other legal and financial risks associated with driving without insurance.

Enter your zip code below to compare car insurance rates from top companies in your area!

References:

  1. http://www.investopedia.com/articles/younginvestors/08/financial-mistakes-new-graduates.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
  2. http://www.naic.org/state_web_map.htm
  3. https://www.thebalance.com/understanding-minimum-car-insurance-requirements-2645473
  4. http://thelawdictionary.org/
  5. http://www.moneycrashers.com/factors-affect-car-insurance-rates/