#student car insurance
By Mark Vallet
Choosing the best car insurance for college students depends on a lot of factors. For example, who owns the car, where the student lives and how often he or she drives all come into play. As a college student, your insurance needs will vary dramatically depending on your exact situation. In some cases, college students should have their own car insurance coverage, but in other instances it makes more sense to be listed as a driver on the parents’ policy.
How to buy car insurance coverage for college students
Student who lives at home and drives own car
“If the college student has the title to the car, he should have his own policy and his parents should remove him from theirs,” says Penny Gusner, consumer analyst for Insure.com.
Depending on the driving record of the student and the type of car he owns, this can be an expensive option for parents, but misleading your insurer can be a mistake. “Parents shouldn’t fib and say the car is theirs because that could lead to problems if there is a claim,” warns Gusner.
If you drive your parents’ car occasionally, their insurance should cover your, just as it would if a friend borrowed the car.
Student who lives at home and drives parents’ car
If you are driving your parents’ car on a regular basis and living with them, you need to be on their policy.
This is a fairly expensive option. A teenaged driver can double or even triple a parent’s car insurance premium. But if you fail to be added to your folks’ policy and get in an accident, the insurer could possibly deny the claim.
Student who doesn’t live at home, is at college in-state, drives his or her own car
If you don’t live at home and have your own car, you should have your own insurance policy.
Student who doesn’t live at home, goes to college in-state, drives parents’ car
If you are taking your parents’ car to school, you should stay on your folks’ insurance policy, even if the car is not being garaged at their house. “Since it is a temporary situation, most insurers will allow your parents to keep their insurance on the car while you are away at college,” says Gusner.
Student who goes to school out of state, drives own car and returns for holidays and summer
As long as the car is titled in your name, you should have you own policy, but using your parents’ insurance company may save some money.
“Some companies offer a discount if the student buys a policy from the same company as his or her parents,” says Gusner.
You should let the auto insurance company know about your plan to use the car in different locations because insurance requirements vary by state.
“You may need to change the garaging ZIP,” advises Kristofer Kirchen, of Advanced Insurance Managers, in St. Petersberg, Florida. “If the school is in a safer (or more dangerous) neighborhood it could affect your premium.”
Student who goes to college out of state, drives parents’ car and returns for holidays and summer
You should stay on your parents’ policy year-round, but tell your insurer where the car is being garaged.
Since the school is in another state, check state laws about registration and insurance. If you need to register and insure the car out of state, your parents may need to add your name to the title.
The new location may change your premium. Many factors go into calculating a car insurance rate, but the driver’s location is typically used to kick off the process. ZIP codes are organized into different risk categories by insurance companies based on the number and severity of claims within the area. From there, car insurance companies create the base rate used as the starting point for drivers seeking coverage, and then go on to review other factors such as the driver’s age, driving record and type of car.
This method, called “territorial rating,” can result in significant rate changes from ZIP code to ZIP code and even within a city due to differences in accident and theft claims. CarInsurance.com’s ZIP code tool shows average car insurance rates for nearly every city and town in the country, so you know what to expect if when you move to a new location.
If your rate increases due to a move, it may be tempting to keep your insurer in the dark, but this is not a good strategy. If you don’t let the car insurance company know about the location change, you run the risk of a denied insurance claim should you get in an accident.
Student who goes to college out of state, only comes home a couple of weeks a year and drives parents’ car
Most insurers would require you to be listed on your parents’ policy as a driver as you are still considered a household resident, according to Blackmon. But it doesn’t hurt to ask.
“If you are truly not coming back home for breaks, your parents can ask if they can drop you from the policy while you’re away, some insurers allow this,” says Gusner. “The downside to this is if you borrow a friend’s car while at college, you won’t have your parent’s car insurance as backup (secondary coverage) if there is an accident.”
Student who goes to college 100 miles from home, doesn’t have a car, returns for holidays and summer and drives parents’ car
While your parents should leave you on their policy so you are covered for holidays and summer, they should get a discount while you are away at school.
“If a college kid is at school at least 100 miles away, parents should absolutely ask for a discount. The discount can vary from zero to as much as 20 percent,” says Ben Blackmon, a personal lines underwriter who has worked in the insurance industry for 18 years.
There are usually conditions for this discount. “Liberty Mutual offers a Student Away at School discount for students in this situation,” explains Jesse Heller with Liberty Mutual Insurance. “For this discount, the student would need to be unmarried and younger than 26.”
Student who has own car, but will leave car at home when attending an out-of-state school
If the car is titled in your name, you should have your own insurance policy — it may even be required.
“Most insurers would require the student to purchase his or her own insurance as the parents would not have any insurable interest in the vehicle,” warns Blackmon.
On the other hand, if the car is co-registered, the vehicle could be put on your parents’ policy. When you are back at school, your parents may qualify for a discount as long as your college is at least 100 miles away.
Car insurance discounts for college students
Regardless of which scenario you fall under, good grades should help keep the premium more affordable.
“Young drivers may be eligible for a good student discount. which is available for students under the age of 25 who achieve at least a B average,” says Heller.
The savings can be substantial. “Typically, good student discounts range from 5 percent up to 15 percent” says Gusner.
Check with an expert to see what options are available to you. “Don’t be afraid to call your insurer or agent to discuss your changing situation, it’s very possible they will find a way to lower your premium,” advises Gusner.
Even after college, there are discounts for students according to Heller, “Liberty Mutual provides additional discounts to recent college graduates who are just starting out. These discounts include new graduate, multi-policy and affinity discounts.”
Finally, consider shopping your coverage. Insurers rate risk differently which can result in dramatic swings in price. Gusner recommends shopping your policy anytime your situation changes. Insurers also have different programs in place and while one may offer a discount for an out of state student, another might not.