Here are 14 things that current or soon-to-be college students and their parents need to know about getting car insurance and keeping the cost of insurance premiums low.
Drivers under the age of 25 face some of the highest car insurance costs of any age group in the US—mainly because they are involved in a lot of accidents. However, that probably doesn’t keep many young men and women from taking cars with them when they go to college.
The good news here is that there are various steps one can take to minimize the impact that insuring a college student's vehicle will have on one’s wallet (regardless of whether it’s the wallet of a parent or a college-bound child):
This piece of advice is only aimed at college students (and their parents) who drive cars that are old and used enough that paying for these forms of insurance coverage—as opposed to liability coverage—is an unnecessary expense at best, and a waste of money at worst.
In part, that's because collision coverage, for example, usually only covers the cash value of a vehicle, so in the case of an older car, the monthly, semi-annual, or yearly premiums you're going to pay probably will exceed the value of the car.
If your vehicle is still worth enough that dropping your collision and comprehensive coverage isn’t a good idea, you could still raise the deductible associated with that coverage. That would lower your premium payments and, again, allow you to hold onto some of your hard-earned cash. Raising your deductible is probably the easiest way to lower your insurance rates. Find out how much it could save you by comparing rates from top companies.
If you're a soon-to-be student, the best thing you can do for your budget is not to bring a car to school with you. That's true even if you already own a vehicle but decide to leave it with your parents while you're away.
After all, says Ray Crisci, worldwide auto and excess liability manager for Chubb Personal Insurance, many insurers "give auto insurance customers a discount on their auto policies if the student is 100 or more miles away from home without the car."
Should you go this route, though, be sure to let your insurer know about it—and also let them know if the car will be left in a garage except for when you come home for visits, or if it'll be driven by someone (your parents, a sibling, etc.) in the meantime. Another smart step to take is to make sure your child is properly insured as a college student.
As an added bonus: if your college is located 100 or more miles away from home and you choose to be car-free, your premiums may be reduced by up to 20 percent while still providing coverage when you return home during breaks or even when you borrow a vehicle while on campus.
Another way to earn a premium discount or rebate—or at least keep related expenses at bay—as a car owning college student is to limit your driving and instead walk, bike, carpool with friends, or use public transportation as often as possible.
Chubb's Crisci also stresses the importance of following parking regulations while at school if you want to keep your car insurance premiums as low as possible. "Campus police departments are known for their propensity to ticket or tow parking violators," he says. "Also, a car parked on campus is most vulnerable to theft. Often, it is parked in an unguarded lot on campus, so [don't] leave valuables--such as a laptop, a GPS, or a camera—in your car because these valuables can attract a thief’s attention."
This is especially important when alcohol is involved, as a number of liability issues could come into play if you make the wrong decisions after you or your friends have had a few drinks. As a young college student, there are many things to consider about your car before letting someone else slide behind the wheel.
Consider, for instance, a scenario in which you ask a friend to act as a designated driver and then allow him or her to borrow your car. Unbeknownst to you, "the designated driver also has been drinking and then is in an accident with another car," Crisci says. "Not only are you responsible for the property damages done to the other person’s car, but if people are injured in the accident, you now have liability exposures to those injured in the accident. If someone was killed in the accident, surviving family members may sue you. Thus, alcohol-related accidents can cause a significant personal and financial risk for all involved."
If the vehicle you wind up taking to school with you is owned by your parents, it may be in both of your best interest for it to be added to your parents' insurance policy (if it isn't already).
And of course it could be a good thing for you, too, because it likely would save you a bunch of money—even if your parents make you pay your portion of their bill, as that amount's still sure to be less than what you'd be charged if you took out your own policy.
Driving as little as possible and taking advantage of your parents' multi-vehicle discount aren't the only ways to save money on car insurance while completing your studies. Buying an older used vehicle instead of a new one can go a surprisingly long way here, too, as doing so will keep your premiums to a minimum.
In addition, if the vehicle you purchase and take to school with you is old enough, you might decide to forego paying for comprehensive or collision coverage--or both--and save even more.
That is, don't buy them unless you or your parents are OK with spending a lot more for car insurance than you would if you bought something smaller or less flashy.
After all, each of the vehicle types mentioned above, along with any other kind of car that's prone to accidents or speeding tickets, usually cost more to insure than your average compact, or sedan.
In general, the more types of "vehicle safety equipment" that can be found in a car, the lower that car's insurance rates are likely to be.
This means, of course, that the flip side is true, too—if your car has few or no anti-theft or security features, you’re probably going to pay more for car insurance.
Some of the equipment that can help you (and your wallet) here: alarm systems, anti-lock brakes, automatic seatbelts, daytime running lights, driver-side and passenger-side airbags, electronic stability control, and rearview cameras.
Some car insurance providers offer discounts to people who go through a defensive driving course or driver's education program. If that sounds good to you, check with your insurer to see if that's something it supports—and if it does, ask them exactly what you need to do to earn the related discount or rebate. (Do you need to participate in a particular program, for instance? Perhaps, you need to show some kind of proof that you completed it.)
Many insurance companies will offer young adult customers (or their parents, depending on who's footing the bill) a reduced rate if they can prove they're full-time students and they achieve a B or better--3.0 and above--grade point average.
These reduced rates can be up to 20 percent lower than what drivers between the ages of 16 and 25 would receive otherwise, depending on the insurer. As a result, be sure to let your agent know if your student has a high GPA.
This piece of advice goes hand in hand with the one shared above. That's because there are other "life events" that can result in you (if you're a college student, or at least of that age) paying less for car insurance than perhaps you currently do.
Simply getting older can be enough to earn some sort of discount, as can life changes like getting married.
So, don't be shy about updating your insurance provider about various aspects of your life if you think they could help lower your premiums.
We have one final, vital tip that should be taken to heart whenever you or your young adult children go to buy any form of insurance, but which can be especially helpful when you or they go to buy auto insurance. Shop around and compare quotes from a number of insurers before choosing one option over another. The benefit of this legwork: it will ensure that you end up with the best possible rates on the right amount and types of coverage.
A: Yes, especially if the school you're attending is located outside of your home state or if it's closer to an urban area than where you currently live.
Regardless, though, this is the kind of information you really need to share with your insurer. Failing to do so could get you into hot water—as in, they could deny future claims later, if something should happen to your car.
A: Yes. Basically, the more urban the campus, the more expensive your car insurance rates are likely to be, while the more rural the campus, the less expensive they’re likely to be—thanks in large part to the crime, traffic, and even parking differences between these two different landscapes.
A: Probably not. Although some insurance companies will extend out-of-state coverage to customers in certain situations—with "temporary" stints as college students being one of them—it's unlikely yours will offer that kind of flexibility in this case. After all, most insurance companies do not allow people to insure cars registered in someone else's name.
Of course, nothing is keeping you from sending your son checks to cover his premium payments; if you want to.
A: For starters, this is a question you or your daughter should pose to the insurance provider.
That said, it seems likely that the parents of your daughter's boyfriend could add her to their car insurance policy—so she can use one of their cars--assuming that's what everyone involved is interested in doing.
A: Whether it's legal or not really isn't a question that can be answered here, unfortunately. That said, it seems unlikely that an insurance company would have the authority to force your son to give up his license. They could suggest it, of course, but that doesn't mean he has to go along with it.
Did all of this come up after you tried to get your son’s name removed from your policy while he’s away at college? If so, that would make sense, as your insurer probably wants some kind of proof that he won’t continue to drive one of your vehicles while at school. Given that, it’s likely they won’t remove his name from your policy until you can provide that proof.
A: If you’re not transferring the title to your brother but he’s still going to drive your car on a regular basis, you should add him to your policy. Ask your agent or insurance company if you need help with this.
Just be warned that adding another driver to your policy like this can cause your premiums to increase. Also, don’t forget that in the end you will be held responsible for anything that happens while your brother is driving your car.
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