Car Insurance for the College Student Explained
As the parent of a college-age student, you’re now becoming fully aware of the cost to raise your child. Adding to this stress, you now have to get your young adult into a good school. The competition is fierce to get into college. If it’s a top-tier school, forget it. Along with all the application stressors, you are also thinking about the logistics of setting up your student’s new residence. The last thing you want to think about is car insurance for your college student.
But you do it because it’s important. The last thing young adults need as they get started is to discover they are in financial trouble because of some bad car insurance choices.
Should college student have their own policy?
Before we get started, let’s settle some of the basics. First, you don’t always have to buy your college-bound student a new car insurance policy. The need for a new policy will depend on where the student will live, who owns the car, or if they will have a car with them at all.
Where will the new student be living?
Let’s start with the easy answers, if your student will be commuting from the family home, don’t have to change anything (assuming the vehicles haven’t changed).
Now, if the student will be living on campus or renting an apartment near school, then you should check with your insurance agent to see if there is a reason to make a change. For instance, if everything else is the same (no new cars), and the address is within the same state, then a simple change of garaging address may be all you need.
Who is the registered owner of the car?
Since insurance policies deal with the concept of insurable interest, the registered owner of a vehicle becomes the issue. Each insurance carrier will address the insurable interest issue differently, so who owns the car can become a factor. Here are the basic scenarios and how to handle them:
- The car is in the parent’s name: If the car you are taking to school is registered to the parents, and the student is listed on their policy, the student may be able to stay on the family policy.
- Your car is co-registered: If the car is registered to both the student and parents, then this is another condition where you can likely keep the status quo.
- The car is in the student’s name: This may present an issue. If the insurance carrier has a strict interpretation of insurable interest, then you’ll likely need to buy separate car insurance for the college student.
Can parents insure a car in another state?
If your child will be attending school out of state, and you want to keep them listed on your policy, this is possible. However, it will depend on the insurance company. Some insurance companies will not allow this because they don’t operate in the state where your student will attend school. In any case, it is best to consult your insurance agent or company to see if insuring the car out-of-state on your current policy is acceptable or cost-effective.
What coverage should a college student have?
When your child starts college, it’s a good time to review your current car insurance coverage. You want to make sure you have the right protection for this new stage in life. In fact, this is a good idea whether your child will be living on campus or commuting.
For instance, if your new college student will be taking a car to school, where will it be parked? If it’s most often parked outside, consider comprehensive coverage. College campuses are full of risks, so it may help to have coverage that will replace the car if it’s stolen, or repair it if damaged by things like hail or vandalism.
If you don’t already have it, collision coverage may be a good idea if the student will be driving to and from class. This coverage may help pay to repair your car if it’s damaged in an accident with another vehicle or some campus property.
Pro Tip:
If you’re leasing or financing a vehicle, collision and comprehensive coverage are normally required by your lender. If you own the student’s car, though, you may be able to drop one or both coverages from your car insurance policy to help save on premiums. Just remember, if your car is damaged and you don’t have comprehensive or collision coverage, your policy won’t pay to repair your vehicle.
Discounts for college students
You don’t have to wait on college to explore ways to save money on auto insurance. However, with the new tuition expenses, this is as good a time as any to save money. There are several auto insurance discounts that come in handy when reviewing car insurance for the college student. Here are a few:
Student Away (Without the Car)
If the car your young college student typically drive is registered to you (the parents), and the student will be living on campus, this discount may be for you. Each insurance carrier may call this discount by a unique name, but it all functions in the same way. If the student is a set number of miles away from the home (eg. 100 miles) then the parent’s policy may qualify for the “Student Away” discount. This makes sense, if the student is away they won’t be driving. They’ll only be operating the car when they come home for holiday or break.
Good Student Discount
Those good grades that go your student into college, will continue to benefit them during the college experience. Make sure to keep up the good work. That’s right, most insurance companies continue to offer a good student discount for unmarried, full-time students up to age 25. If you are unsure if your company offers this benefit, ask your insurance agent whether you qualify. Typically, the minimum grade point average to qualify is 3.0 – that’s a breeze for your young scholar!
Multi-Policy Discount
If you already bundle your home and car insurance, then you and your child are already benefiting from this discount. However, if your college student needs to purchase their own policy and is renting an apartment, then they may also qualify for a discount when bundling their car and renters insurance policies. Renters’ insurance doesn’t cost much, so this makes a lot of financial sense. Note: not all insurance carriers offer multiple lines, so check to see if your insurance carrier can write both types of insurance.
Anti-Theft Device Discount
Not all campuses are in good locations. Frequently, young students are living in areas that may have a higher frequency of theft or vandalism. Before moving into a new apartment near campus, it’s a good idea to research local crime statistics. This may help you select an apartment in a safer neighborhood. For this reason, if you’re going away to college and bringing your car, it may be a good time to purchase an anti-theft device. In fact, an anti-theft device may reduce the likelihood of your stuff being stolen, and save you a few dollars on car insurance.
The bottom line
Car insurance for the college student doesn’t have a cookie-cutter set of recommendations. Each family and student will have their own individual and unique needs. Your unique needs and circumstances will likely be the greatest impact on the premiums you pay. We highly recommend you discuss your coverage with an insurance agent when you have large life-changing events like college. And if you’re more of a do-it-yourself type, you can get an online car insurance quote to see if you’re getting the best rate possible.
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