The Most Misunderstood Part of Auto Insurance for College Grads

After graduating college and leasing my first car, I wanted car insurance that would cover me for everything, at a decent price. I did the thing -- shopped around, checked prices, and speculated how much I could save by bundling with family. I came to one horrifying conclusion:

Full coverage auto insurance doesn't exist. Not on this planet, nor anywhere else.

It's one of the most misunderstood parts of auto insurance for drivers new to buying their own insurance, i.e., college grads. Below, more on "full coverage" and how to get good insurance.

Full coverage is a myth

Car insurance is a colorful patchwork of protections with more holes than a hunk of Swiss cheese. If you call a car insurance representative and ask for "full coverage," you could end up with all the major insurance types and still lack complete coverage.

The big insurance types:

• Comprehensive insurance (theft, vandalism, acts of God)
• Collision coverage (damage to your car or other property)
• Liability insurance (you damage someone or something, and it's your fault)

Each type of car insurance covers a different edge case. The big ones above cover a lot, but there are still gaps. You may have to purchase separate coverage for towing, rental reimbursement, (while your car is getting repaired), or ride-hailing (if you work for Uber or Lyft).

Full coverage is a myth. But even new college grads can get good coverage. The trick is to shop around with car insurance companies for good rates and buy exactly what you need.

What college grads need for car insurance

Pretty much every driver needs liability insurance. Most states require it. It's the cheapest form of insurance and the absolute bare minimum to drive. Liability ensures you can pay if you hit someone, their car, or their property, up to the amount you're insured.

Once you get liability, things become murkier. Unless you're leasing, in which case you might need comprehensive insurance, drivers have leeway when buying car insurance.

I'd begin with the cost of your car. Can you afford to replace it? If not, consider insuring it for up to the cost of replacement. Start with liability, collision, and comprehensive coverage. Then consider relevant add-ons like gap coverage, new car replacement coverage, etc.

Before that, you want to shop around for affordable insurance policies. Emphasis on affordable -- when you're young, auto insurance is pricier than ever.

Affordable car insurance for college grads

Two of the most affordable car insurers are Geico and State Farm.

Geico, known for its quirky mascot and weird commercials, gives young drivers solid deals. The average yearly rate for Geico drivers with clean driving records is $1,506, much less than the $2,389 national average for drivers with similar records.

State Farm, one of the biggest car insurers, is a great option for drivers with a history of prior accidents. The average yearly rate for clean drivers is $2,427, pricier than Geico's. But State Farm is top-rated for customer service and offers tons of coverage options.

Other discounts for college grads

FYI, insurance is one of those industries that looks similar to how it did a hundred years prior. Chances are high you use the same company as your parents. Consider bundling policies for multiple drivers or auto and renters policies to lower the cost of car insurance. You could save hundreds of dollars a year.

Other discounts college grads often qualify for:

• Good driving (for drivers with clean driving histories)
• Low mileage (for drivers who drive infrequently)
• Multi-policy (for drivers who bundle rent and auto insurance)

Car insurance is easy to misunderstand. You can't get 100% full coverage, but you can get quite a bit. Pull quotes from your top three to get the best rates, discounts and bundles included.