College Kids: Vehicle Insurance Dependants?

Whether or not college-age children should be on their parents' vehicle insurance depends on several factors. While there is no age limit for children to remain on their parents' car insurance, it is usually more cost-effective for college students to stay on their parents' policy, especially if they are deemed high-risk drivers. However, if the college is over 100 miles away and the student won't be driving the family car, parents can consider removing them from the policy to save money.

Student-specific discounts

Students can be expensive to insure, as they are deemed "high risk" by car insurance companies. However, there are several student-specific discounts that can help to reduce the cost of insurance for college-age children. Here are some options to consider:

Good Student Discount

Many insurance companies offer a good student discount for full-time students who can maintain a "B" average or above in their grades. This discount can vary, typically ranging from 5% to 25% off select coverages. Some companies, like Progressive, specify that the student must be under 23 years old to qualify for the good student discount, while others simply state that the student must be under 25.

Distant Student Discount

If your college-age child attends a school that is over 100 miles away from your home and does not have a car at school, you may qualify for a distant student discount. This discount is usually around 15% to 30% off select coverages and is offered by many auto insurance companies. Progressive, for example, offers this discount to students 22 years old or younger who meet the distance criteria.

Teen Driver Discount

Insurance companies like Progressive offer a teen driver discount for drivers who are 18 years old or younger. This can help college-age children who are still in their late teens save money on their car insurance.

Alumni Associations and Student Organization Discounts

Some insurance companies, like GEICO, offer discounts for members of select alumni associations, colleges, universities, and student organizations. These discounts can help students save money on their car insurance while attending a particular school or being a part of a specific organization.

Student Away Discount

If your college-age child is away at school and not driving your car regularly, you may be able to request a reduction in rates from your insurance company. Even if your child remains on your policy, changing their status from a primary driver to an occasional driver can result in lower insurance costs. An occasional driver is typically defined as someone who drives less than 25% of the car's annual mileage.

It's important to note that insurance policies and discounts may vary depending on the company and state. Be sure to review the specific rules and guidelines of your insurance provider to understand what student-specific discounts are available and how you can take advantage of them.

Removing children from insurance policies

There are a few things to consider when deciding whether to remove your college-aged child from your insurance policy. Firstly, it's important to note that there is no age limit for children to remain on their parents' car insurance policies, and they can usually stay on as long as they live at home or are full-time students. However, if they move out permanently, they will typically need their own policy.

Reasons to Remove Children from Insurance Policies:

• Reduced Costs: Student-aged drivers are deemed "high risk" by insurance companies, which increases the cost of insurance. Removing them from your policy can result in considerable savings, with potential reductions of $1,000 to $2,500 annually.
• Low Risk of Lapse in Coverage: If your child is mature and responsible enough, removing them from your policy can be a step towards financial independence. It can also help them build their credit score, making future purchases easier.
• Lower Risk for Parents: Adult drivers are statistically less likely to cause accidents. Removing a young driver from your policy can result in a lower premium for you as the policyholder, reducing the probability of claims and liabilities associated with youthful drivers.

Reasons to Keep Children on Insurance Policies:

• Continuous Coverage: Keeping your child on your policy ensures they have continuous insurance coverage, which can lead to reduced premiums when they obtain their own policy. Some insurers may reject applicants without a history of continuous coverage.
• Peace of Mind: If your child occasionally drives your car or other family vehicles, keeping them on your policy ensures they are covered in the event of an accident. This is especially important if they are still learning to drive or have a poor driving record.
• Student Discounts: Many insurance companies offer discounts for students, which can help offset the higher costs of insuring young drivers. Good grades can also lead to lower rates, with most carriers offering discounts for students with a "B" average or better.

How to Remove Children from Insurance Policies:

If, after considering the above factors, you decide to remove your child from your insurance policy, the process is relatively simple:

• Contact your insurance company online or by phone.
• Provide any required documentation, such as proof of your child's new address, insurance policy, or vehicle registration.
• Alternatively, you can list your child as an excluded driver, but this means they cannot drive your car under any circumstances.

Continuous insurance coverage

When considering whether college-aged children should remain on their parents' vehicle insurance policy, one important factor to keep in mind is maintaining continuous insurance coverage. Having uninterrupted insurance coverage has several benefits and can impact a young adult's financial future.

College students who are listed on their parents' car insurance policy often benefit from better coverage and lower rates. This is because insurance companies view the risk of insuring a young, typically less experienced driver, as part of a family plan, which can result in cost savings. Removing a college-aged child from a parent's policy and having them purchase their own insurance could result in significantly higher rates, especially if they have little to no credit history or driving record of their own.

Continuous coverage also ensures that a child has uninterrupted access to the benefits and protections offered by the parents' insurance policy. This can include liability coverage, which protects the insured in the event of an at-fault accident, as well as comprehensive and collision coverage, which covers damage to the vehicle. Maintaining continuous coverage can also help the child establish and build a positive insurance history, which may lead to better rates and coverage options in the future.

In addition, continuous coverage can provide peace of mind for both parents and college-aged children. For parents, knowing that their child is continuously covered can reduce worry, especially if the child is attending college away from home and may be driving in unfamiliar areas. For the college student, having continuous coverage means one less thing to worry about during an already busy and often stressful time in their lives.

It's important to note that insurance laws and regulations can vary by state, so it's always a good idea to review your specific situation with a trusted insurance professional. They can help you understand the implications of removing a college-aged child from your policy and ensure that you and your family have the appropriate level of coverage in place. Maintaining continuous insurance coverage for college-aged children can provide important benefits and protections during this transitional time in their lives.

Risks of young drivers

Young drivers are considered "high risk" by car insurance companies, and for good reason. Here are some of the risks associated with young drivers and how they can be mitigated:

Inexperience and Immaturity

Young drivers, particularly those between the ages of 16 and 17, are considered high-risk due to their inexperience and the characteristics associated with their youthful age. They are more likely to engage in risky driving behaviors such as speeding, following too closely, and accepting smaller gaps between vehicles. This, combined with their lack of experience in recognizing and responding to hazards, increases their likelihood of being involved in a crash. Graduated licensing systems, which allow for supervised practice driving and restrict driving in high-risk situations, have been shown to reduce crashes among young drivers.

Alcohol and Substance Use

Alcohol and substance use is a significant risk factor for young drivers. While young drivers are less likely than adults to drink and drive, their crash risk increases substantially when they do. The combination of drinking and driving is made worse by their relative inexperience with both alcohol and driving. In addition, the presence of alcohol can affect their decision-making abilities and slow their reaction times. Similarly, driving under the influence of drugs is illegal and dangerous, as drugs can affect a person's abilities long after they have been consumed.

Fatigue

Fatigue is another factor that increases the risk of crashes among young drivers. Driving when tired or during times when one would usually be sleeping can increase the likelihood of crashing. It is recommended that young drivers avoid driving at night, especially in the first few months after receiving their license, and stick to short trips if driving during those hours is necessary.

Vehicle Choice

Young drivers often drive older and less safe cars, which can increase their risk of being involved in a serious crash. It is recommended that young drivers aim for vehicles with a 4- or 5-star safety rating and look for features such as autonomous emergency braking, electronic stability control, and curtain airbags.

Distractions

Distracted driving, such as using a mobile phone while driving, is a significant risk factor for all drivers but can be especially dangerous for young drivers. Young drivers should avoid any distractions while driving, such as using their phones, as even a couple of seconds of distraction can lead to a crash.

Insurance for married students

When it comes to vehicle insurance, college-aged children can remain on their parents' policy, especially if they are full-time students or live at home. However, if they move out permanently, a separate policy is typically needed. Some insurance companies may require the child to be removed from the policy if their college is over 100 miles away. Keeping a child on a parent's policy can be beneficial if they will be driving regularly at college or commuting to a nearby school. It provides extra coverage in case of accidents, passenger injuries, or emergencies. Additionally, it helps build continuous insurance coverage history, which can lead to premium deductions and lower rates in the future.

Now, let's focus on insurance for married students:

Married students have a few options when it comes to health insurance. Firstly, they can choose to remain on their parent's health insurance plan if they are under 26 years old. Their married status does not affect their eligibility as a dependent under their parent's plan. Alternatively, they can enrol in their spouse or partner's health insurance plan, regardless of whether it is an ACA marketplace plan or employer-based insurance. This option offers comprehensive coverage, and employers often pay a significant portion of the premiums.

In terms of vehicle insurance, if a married couple lives with their parents and drives their vehicles, they can stay on their parents' policy as listed drivers. However, if they have their own vehicle, they can choose to insure it under their parents' policy or purchase a separate policy. If the married couple does not live with their parents, they will need their own insurance policy.

Besides parental and spousal insurance, married students have other options for health insurance. They can consider the following:

• School-sponsored student health plans: Many colleges and universities offer student health insurance plans, which are often more affordable than private insurance. These plans typically comply with the Affordable Care Act (ACA) and cover essential health benefits.
• Health insurance through employment: If a married student is employed, they may be able to obtain health insurance through their job. Many employers offer health insurance to part-time employees as well.
• Affordable Care Act (ACA) Health Insurance: Married students can purchase health insurance through the ACA marketplace. While it may be expensive without subsidies, ACA plans offer comprehensive coverage, including preventative services and pre-existing conditions.
• Catastrophic health insurance plans: These plans are designed for individuals under 30 years old and offer comprehensive coverage with high deductibles. They are ideal for emergency coverage but may not be suitable for managing chronic conditions.
• Medicaid: Low-income married students may qualify for Medicaid, a government health insurance program based on income and family size.

Frequently asked questions