Best Auto Insurance Coverage For A College Student
By Aaron Crowe
Parents of students heading back to college with a car might want to give their children a lesson on auto insurance.
Depending on who owns the car and if the student has their own auto insurance policy or is on their parents’ policy, it can be a complicated discussion on how much insurance they should have. Coverage can also depend on when and where a student drives, such as only around home during the summer or school breaks, and driving to an out-of-state college, for example.
Even though they’re legally adults, college students can still be under their parents’ care when it comes to insurance coverage.
Laws vary by state, so check with your insurance carrier on your specific situation. Here are some factors to check on:
Is the insured car the student drives at college owned by their parents?
If so, that could bring some liability back to the doorstep of the parents if there’s an accident, says Eric Stauffer of ExpertInsuranceReviews.com. Along with having enough auto insurance, parents should also consider adding an umbrella policy to protect their assets, Stauffer says.
Is the student away at college without a car and only drives when they come home?
Adding them to a family policy as “occasional drivers” to a vehicle that has coverage is a good idea, says Ellie Kay, a family financial expert who has written 15 books, including the upcoming “Lean Body, Fat Wallet.” Some insurers will also let students be taken off a policy for the school year and then added back during the summer, though they may be required to be on the policy year-round if the school is within 100 miles and the student could come home on weekends to drive.
If a student borrows your car a few times, any accident they cause would be covered just as a friend would if they borrowed your car.
Does the student own a car?
As an adult, they should have their own insurance coverage. However, it may be cheaper for a college student to be part of a parent’s auto policy, allowing for a multiple car discount, Kay says. A student having a policy on their own will likely pay more, she says.
What type of insurance coverage should the student have?
Kay, who has two children in college, recommends getting liability, uninsured motorists and medical coverage as part of the basic insurance on a college student’s car, even if there isn’t full coverage of comprehensive and collision on the car.
Liability coverage is required by most states, she says, but insurance for uninsured motorists and medical coverage for passengers in the student’s car can sometimes be waived. Such extra coverage, however, can be inexpensive and important to have, since young drivers are statistically more likely to be in an accident, Kay says.
Even though most students have few assets in their name, they should still have more than the minimum liability coverage Stauffer says. He recommends having at least $100,000 in personal injury liability and $50,000 in property damage coverage.
Does the student drive an old, inexpensive car?
Insurance rates are cheaper for older cars, a student should consider driving one without full coverage if they want to save money, Kay says. A student driving an old Dodge Dart instead of a dad’s BMW could save hundreds of dollars a year in car insurance, she says. And if the insurer requires having the car title in the student’s name, then do it if it saves money, she says.
Who pays?
The answer to this is unique to each family, but Kay has a smart solution in her household: Her children either pay for their own insurance after graduating from college, or whenever they get an accident or have a moving violation, whichever comes first.
“The moving violation and accident part of the agreement motivated them to drive safely because they would have to pay their own car insurance if they were not driving safely and got a ticket,” she says.
Aaron Crowe is a journalist who covers the auto industry for CheapCarInsurance.net.
