Cars 201 | Car Insurance for International Students
In the United States, each individual state except New Hampshire has laws in place requiring drivers to carry a minimum amount of car insurance on their vehicle. International students should consult their designated school official and local DMV to learn about the specific rules for their state.
Understanding Auto Insurance
Here are some key terms that will help you understand how car insurance works:
If you need to make an auto insurance claim because your car was damaged in an accident, you'll have to pay a predetermined amount before the insurance company will pay for repairs. This deductible can start from $0 all the way to $2500 or even more. Usually you could lower down the monthly payments by choosing a higher deductible.
If you get into an accident with another vehicle, the other party may need medical attention. If the accident damaged another person's vehicle, they'll need repair services too. In either case, liability insurance pays for those costs when the accident was your fault.
This type of insurance pays for damages to your vehicle caused by anything other than a collision with another vehicle. This includes vandalism, theft, fire and accidents caused by animals.
You'll need collision coverage to pay the cost of repairing or replacing your vehicle if you are in an accident with another car or if you hit an object.
This is a package of insurance products that include collision and comprehensive coverage. Purchasing the minimum amount of insurance required by state law is less expensive than full coverage; however, if you get a loan to pay for your automobile, keep in mind that full coverage is always a requirement.
This is an additional service you can add to your car insurance policy. It covers the costs associated with problems like running out of gas, experiencing flat tires, locking keys in the car and requiring tow services.
The lienholder or loss payee identified on your auto insurance policy is the bank or financial institution that lent you money to buy the car. Until you pay off the loan, they have a financial interest in the vehicle. In the case of a total loss, the insurance company will first make the claim payments to your auto lender to cover your outstanding loan balance. In the case of normal damages and accidents, the insurance company will directly make the claim payments to you.
Auto insurance companies
Choosing an auto insurance company is important. While many people simply choose the company that offers them the lowest rate, it's smart to read the fine print and understand the coverage.
Check local reviews of the company to see if they pay claims in a timely manner. This is also a great way to determine how other users feel about the company's customer service department and billing practices.
Major auto insurance companies like State Farm and Geico offer automobile insurance policies for international students with valid learner's permit or driver license. Please consult the company's customer service for details since policy could vary a lot by states.
Some insurance companies consider an international student's past driving record in their home country. Some insurance companies have special discounts for college students. It's important to shop around and get quotes from several companies for the best combination of rates and service.
International students may receive an extremely expensive quote due to the lack of driving history, young age and sometimes owning a luxury car. There are some innovative insurance companies in the market that have different pricing and underwriting systems that may help lower down your monthly payments such as:
Metromile is a pay-per-mile car insurance company. This company charges you by how much you drive. So if you are living in the city or you only use your car for short distance commute, this could be a great option.
Root is another great option for international students with good driving skills. This company rewards good driving behavior with lower rates.
Paying for auto insurance
A quote is a free service provided by insurance companies. They are an estimated amount you could pay for car insurance from a specific company. Quotes vary widely, so it's best to get several of them. To get a quote, you'll need to provide personal details like your address in the U.S. and other personal information. Be sure to ask each company if you qualify for any additional discounts.
After choosing a company, you'll pay the insurance premium. Some companies allow their customers to pay monthly, while others require the full amount of a six-month premium upfront.