If you’re a college student needing car insurance while on campus, or a parent who needs insurance coverage for a child away at school, it’s smart to understand the costs of car insurance for college students and how to find the best deal.
The typical college student looking for car insurance may already be at a disadvantage.
A 2016 study by CarGurus.com puts the average cost of car insurance for “young adults” at approximately $2,000 – although many college-age kids way underestimated that cost.
According to the survey, 25 percent of the young adults surveyed believe car insurance will cost $250 or less per year, while another 28 percent put the cost at $500.
But there’s more than cost to consider when it comes to car insurance for college students.
To get a better handle on the topic, we asked several leading experts what steps they would take to get the best, most comprehensive and affordable car insurance policy.
Here’s what they said should be priorities in the insurance-buying process for college students.
Check your family’s car insurance policy
Check to determine eligibility for coverage under the parents’ policy because this provides the best opportunity to maximize protection at the most reasonable price.
“If the student has possession of a car and will be living in student housing or an apartment for the school year, they are still considered a member of the family household and can remain on the household (i.e., parents’) auto insurance policy,” says Carol Anderson, assistant vice president for underwriting at MetLife Auto & Home. “But if the student is making a permanent relocation, they would need to purchase their own auto insurance policy. This vehicle and driver would be removed from the household insurance policy, which may result in a premium reduction for the parents.”
Anderson advises students and parents to notify the insurance company if the student isn’t taking a car to college.
“If the student is not taking a vehicle to school, the household auto insurance policy may be eligible for discounts,” Anderson says. “The student would still be a covered driver when using a household vehicle during school breaks and other trips home.”
Focus on car insurance discounts
A good insurance representative can assist a student in learning about insurance and determining the right amount of coverage.
“During the quote process, the student should also ask about discounts for which they might be eligible,” Anderson adds. “Many companies provide discounts for things like good grades (at least a 3.0 grade average should do the trick), safe driving and pledging not to text and drive.”
Personal car insurance for college students
Brandt Minnich, vice president of sales at Mercury Insurance in Orange County, California, advises parents and guardians of college students to “know what they need to protect” with a college-aged son or daughter.
“This means you not only have to consider your college student’s car, but also your own assets,” Minnich says. “If you are supporting the student and the car is in your name then you could be liable if the student gets into an accident, so have enough liability coverage to protect you and your assets.”
Minnich also advises considering the value of the student’s vehicle.
“If the vehicle isn’t worth at least four to five times the cost of the premium, then it probably doesn’t make sense to keep comprehensive and collision coverage,” he points out.
Find a car insurance expert
It’s always a smart idea to work with an agent. Car insurance is a pretty complicated purchase and you want to make sure you are getting the right coverage at the best possible price.
“An agent can help you get the right coverage and explain what is and isn’t covered when it comes to your student,” Minnich says. “Based upon your needs and your budget, they can offer different solutions tailored to your college student’s situation.”
Don’t lend your car to college friends
Lending your car means you are also lending out your insurance. Caution students on letting others drive their vehicle and discourage communal use. If needed, have the keys stored in a private place.
Store car insurance documents safely
College students are infamous for their ability to forget key personal items, such as house keys, phone chargers and bank cards. That’s not good, but a worse offense is not having quick access to car insurance documentation in the event of an accident or traffic stop.
“Make sure your student stores all of the documents they need in one secure location in their vehicle and on their person,” says Elsabeth Hepworth, an insurance specialist with TrueNorth Insurance in Cedar Rapids, Iowa.“The student should be able to locate their auto identification cards and emergency phone numbers at a moment’s notice and ensure that they are all up to date.”
Before they leave, prepare an easily accessible list of phone numbers for roadside assistance and claims, so that your student has them on hand in the event of an accident or loss.
Deterring theft helps lower insurance costs
Make sure that your student understands the importance of keeping all valuables out of sight in unattended vehicles — and always remember to lock the car.
With more students toting laptops to class, it’s important to make sure that if they are not on your student’s person, they are somewhere safe.
Add students to your family insurance policy
The biggest mistake is when parents allow a child to use a vehicle, but do not add them as listed drivers on the policy, says Thomas J. Simeone, a personal injury attorney at Simeone & Miller, LLP, in Washington, D.C.
“Parents do this to avoid a premium increase, but it’s a huge risk,” he says. “That’s because if the child causes an accident, the insurance company may deny coverage.”
Moreover, in some jurisdictions the parent can be sued in addition to the child – even if the child’s driving had nothing to do with the parent – simply because the parent owns the car. If that happens and the insurance company denies coverage, the parent will also be liable and that is a bigger problem because they likely have more significant assets than a student.
Bad driving record? No car at college
If a student has a bad driving record — loaded with speeding tickets and an accident or two — the parent or guardian should re-think allowing the child to drive the car.
“The parent can be liable for negligent entrustment if the child causes injuries and the parent is found to have entrusted the car to a known bad driver,” Simeone adds. “Again, this makes the parent liable, which can be more risky than a child. And, at the very least, a parent should increase their liability coverage to the maximum allowed and consider an umbrella policy, which is affordable and offers an additional $1 million or more of liability protection.”