College Students: Stay On Auto Insurance?

Whether a college student can remain on their parents' auto insurance policy depends on several factors, including the student's residence, access to a car, and driving frequency. While some parents may choose to remove their child from their policy to reduce costs, others may opt to keep them on for continuous coverage and protection in emergencies. Staying on a parent's policy is usually more affordable for students, especially if they split the cost. It also provides the convenience of being covered when driving each other's cars. However, specific circumstances, such as the school's location and insurance requirements, can influence the decision.

Staying on a parent's policy

College is a significant time for parents and their children, and insurance is one of the many considerations to make. Here is some information about keeping your child on your policy while they attend college.

Keeping your child on your insurance policy while they are in college can offer several benefits and provide peace of mind for both parents and students. Firstly, if your child will be driving at school, either commuting or bringing their car, it is advisable to keep them on your policy. This ensures they are covered in case of any accidents or incidents. Even if they do not have a car at school, keeping them on your policy is a good idea if they will be driving during school breaks when they return home.

Secondly, if your child will be driving a friend's car at school, keeping them on your policy is recommended. While the friend's insurance should cover any damages if your child is at fault, your child could be sued personally, and having their own insurance provides liability coverage. Additionally, your child will be covered if they are hit by a car while walking, biking, or as a passenger in someone else's vehicle.

Thirdly, maintaining your child on your policy can make you eligible for various discounts. Insurance companies often offer "good student discounts" for students with good grades and "good driver discounts" for those with clean driving records. "Distant student discounts" are also available for full-time students under 23 who attend school a certain distance from home. Combining these discounts can result in significant savings on your policy.

Lastly, keeping your child on your policy helps them build a record of continuous auto insurance coverage, which can lead to lower insurance costs when they eventually obtain their own policy. Some insurance companies may even reject applicants without a history of coverage.

However, it is important to note that keeping your child on your policy may not always result in cost savings. Young drivers are considered "higher risk," which can increase your premium. Removing your child from your policy could lead to potential savings of over $1,000 annually.

Key Considerations:

• If your child is not taking a car to school and will not be driving during breaks, removing them from your policy may be a good option.
• If your child is studying abroad, they will need their own insurance policy as your policy will not extend coverage internationally.
• Remember to re-add your child to the policy when they return home for breaks if they plan to drive.
• Encourage safe driving practices to avoid accidents or violations that could increase the family insurance premium.

In conclusion, while the decision to keep your college student on your insurance policy depends on various factors, it is generally advisable to maintain coverage for their protection and to build a positive insurance history.

Discounts for younger drivers

Young drivers are considered high-risk and tend to pay substantially more for car insurance. However, there are several discounts available that can help lower the cost of insurance for younger drivers. Here are some of the most common discounts offered by insurance companies:

Good Student Discount

Full-time students who can maintain good grades, typically a B average or above, are often eligible for discounts on their car insurance. Companies like Allstate, Geico, State Farm, and Mercury offer discounts of up to 25% for students with good grades.

Safe Driving Course Discount

Many insurance companies offer discounts for young drivers who complete a safe driving or driver's training course. This not only helps teach young drivers the rules of the road but also encourages safer driving habits, reducing the risk of accidents. Examples of companies offering this discount include Geico, State Farm, Allstate, and Travelers.

Distant Student Discount

If a young driver attends college away from home, typically more than 100 miles away, and leaves their car behind, they may be eligible for a distant student discount. This discount recognizes that the student will be driving less and therefore has a lower risk of accidents. Geico and Nationwide are among the companies offering this discount.

Telematics or Usage-Based Insurance

Some insurance companies offer discounts based on driving behavior monitored through telematics devices or apps. These programs track driving habits such as speed, braking, and time of day driven. Safe driving habits can lead to discounts, while poor driving habits may result in higher rates. Companies like Progressive, Nationwide, and State Farm offer telematics programs.

Multi-Car and Multi-Policy Discounts

Adding multiple vehicles to a single policy or bundling different types of insurance policies (such as homeowners and auto) with the same company can often result in discounts.

Vehicle Safety Features

Insurance companies may offer discounts for vehicles equipped with safety features such as airbags, anti-lock brakes, and anti-theft devices.

Other Discounts

Other discounts that may be available include military discounts, accident-free discounts, and discounts for paying premiums in full or opting for paperless statements.

Student-specific discounts

Students can save on their car insurance premiums by getting good grades, bundling policies, or through their university, fraternity, or sorority.

Good Student Discount

Every major car insurance company offers a good student discount, which is available to student drivers who can demonstrate good grades or test scores. Both high schoolers and full-time college students under the age of 25 are eligible. The criteria for demonstrating good grades vary depending on the insurance company. For example, GEICO, Nationwide, and Liberty Mutual require students to maintain a "B" average or better, while Progressive requires a "B" or better-level GPA. State Farm's criteria are a GPA above 3.0.

Driver's Education and Training Programs Discount

Completing a driver's education class can help students reduce their insurance premiums. GEICO and State Farm both offer their own driver training programs for young drivers.

Distant College Student Discount

This is a discount for the parents or guardians of a student. If the student attends college at a significant distance from their parents' home, the parents can get a discount on their car insurance. This applies when the student doesn't have their own vehicle and is only likely to drive their family car during school breaks. Progressive, for example, offers this discount to students aged 22 or younger who are enrolled in an educational institution more than 100 miles away from home.

Affinity Membership Discount

Some insurance companies offer discounts for members of certain fraternities, sororities, and honors societies. GEICO, for instance, offers an affinity membership discount to members of fraternities, sororities, and honor societies.

Alumni Association Discount

Some insurance companies, such as GEICO, offer discounts for members of alumni associations, colleges, and universities.

Primary vs occasional drivers

The primary driver of a car is the person who drives it the most and is usually the person who owns the vehicle. The primary driver's driving record, age, location, and other factors are used to calculate insurance premiums and coverage. As such, insurance companies consider primary drivers to be riskier and charge higher premiums.

On the other hand, an occasional driver is someone who drives the car but not as often. Occasional driver insurance is designed to provide coverage for when the vehicle is used by a particular driver who is not the primary user of the vehicle. Occasional driver insurance is usually only available in certain circumstances, such as collectible cars or shared family vehicles. Occasional drivers are generally considered to be riskier, as they are often inexperienced or low-mileage drivers.

For college students, it is usually more affordable to stay on their parents' car insurance policy, as long as they haven't moved out permanently. However, if a student has their own car and is the sole person listed on the title, they will likely need a separate policy, which typically costs more.

If a college student remains on their parents' policy, they may be changed from a primary driver to an occasional driver, especially if they attend college far from home and do not plan on driving the family car often. This can help reduce insurance costs, as occasional drivers are generally associated with lower premiums. However, it is important to note that occasional drivers may have limited coverage and liability protection if they are involved in an accident while driving a vehicle they are not principally insured on.

Out-of-state college students

If you're an out-of-state college student, you may be wondering if you can stay on your parents' auto insurance policy. The answer depends on several factors, including the state you're in, the insurance company, and your specific situation. Here's what you need to know:

Insurance Policy Requirements for Out-of-State College Students:

Firstly, it's important to understand that most states allow out-of-state college students to remain on their parents' auto insurance policies, especially if their primary address is still their parents' residence. This means that if you're only temporarily residing in another state for your studies and intend to return home during breaks, you can likely stay on your parents' policy. However, it's crucial to verify this with your insurance provider, as some states and insurers may require you to obtain your own policy.

Factors to Consider:

When determining the best course of action, consider the following:

• Vehicle ownership: If you're taking a car to college, it's essential to clarify who owns the vehicle. If the car is registered and insured in your parents' names, they will likely need to keep it on their policy. If you own the car, you may need to insure it separately, especially if you have moved out permanently.
• Vehicle location: The location of the vehicle plays a significant role in insurance requirements. Vehicles need to be insured based on the state in which they are primarily garaged. Therefore, the ZIP code of the college location may impact insurance rates and requirements.
• Living arrangements: Whether you're living on or off campus can also affect your insurance situation. If you're living off campus and have a separate residence, you may be considered a resident of that state and may need to obtain your own policy.
• Driving frequency: Consider how often you'll be driving at college. If you don't plan to drive regularly or won't have access to a car, it might be more cost-effective to be removed from your parents' policy.
• Cost implications: Staying on your parents' policy is usually more affordable, as it allows you to split the cost of certain coverages. However, obtaining a separate policy may result in more affordable rates, especially if the college's ZIP code has lower insurance rates.

Recommendations:

To make an informed decision, it's recommended to contact your insurance provider and discuss your specific situation. Be transparent about all the details, including the vehicle's location, ownership, and your living arrangements. Additionally, consult the Department of Motor Vehicles (DMV) in both your home state and the state where you're attending college to understand their specific regulations.

Frequently asked questions