Children Going to College

Everyone knows that when we add teenage drivers to an auto policy, the price tends to increase drastically, but what happens when it is time to send them off to college? The answer to that question is not very black and white because it depends on several factors like driving history, the location of the college, and the location of the vehicle.

Having a child move off to college can result in the child needing their own policy, an increase in premium, or even an added discount in some instances. Let’s take a look at a few different scenarios and what you need to take on your auto policy.

In-State College

The first factor to look at when someone has a driver on their policy who is moving away to go to college is the location of the college in relation to the permanent address of the family. In most cases, students tend to go to college somewhere in their home state. If this is the case, changing insurance to fit the new situation should be relatively easy, but some action is still required. Parents should call their current insurance company and ask them to change the garaging address of the student’s primary vehicle to their college address. Each vehicle on the policy can have an address listed for where it is primarily stored. This is important to note because insurance companies need to know where each vehicle is so that they can set the premium accordingly. The biggest mistake that parents make when their children go off to college is thinking that nothing needs to be done to update the policy. If there is no update to the garaging address, the insurance company could possibly deny a claim caused by the new college student since the policy was technically written incorrectly.

Leaving the car at home?

If the college student is moving to a school away from home but is leaving their vehicle at home, there is no need to change the garaging address on any of the vehicles. This situation will usually only result in a positive change to the premium if any. Most insurance companies have something called a “Distant Student” discount. Other companies may call this a “Driver Away at College” discount, This discount applies when a student on the policy is currently attending and living near a college that is over 100 miles away and does not have access to any of the insured vehicles. Insurance companies are happy to give a discount here because the student will only be driving when they are home for holidays, breaks, or weekends. Just like in any scenario, the insurance company will not know that this is the case unless you tell them. Be sure to call and let them know if you have a distant student!

Out-of-State College

Moving out of state for college requires a few more moving parts, insurance being one of them. A student or anyone for that matter, who moves out of state should always get a new insurance policy that corresponds to the new state that they live in. This may seem like a drastic move, but it is typically to only way to insure the student properly. Most states do not mirror one another exactly when it comes to road rules and insurance, so most insurance companies will not give the option to choose a vehicle garaging address that is in a different state than the policyholder, and insurance companies will also not allow address changes across state lines.

Why did my premium increase?

Insurance rates are tricky. Sometimes, a change that you expected to decrease the rate has the opposite effect, and vice versa. Here are a few factors that may explain why your rate increased when your kid went off to college.

• The school is in a big city
• The area has a higher frequency of accidents, theft, or disasters
• Your particular insurance company has higher rates for policies where vehicles are garaged in different locations.

Ways to combat the price increase

With tons of reasons for the policy to increase, it is important to understand that you can leverage certain discounts on your policy to cut costs but still keep valuable coverage. Of course, you want to ask your agent about discounts that you may qualify for, but this is also a great time to shop your insurance with some other insurance companies. This is the best way to be sure that you are still getting great value for the coverage you have. Below are some discounts that you could potentially add to your policy if you have a driver who will be away at college:

• Good Student Discount: If your new college student can maintain good grades consistently, you will qualify for one of the biggest discounts that young drivers can be eligible for. Most insurance companies will let anyone with a Grade Point Average (GPA) above 3.0 qualify for this discount. You’ll need to see a copy of report cards or transcripts to your agent to get this implemented.
• Utilize Telematics Programs and Driver Tracking Technology: Most carriers have some sort of program that drivers can enroll in to get a discount on their auto insurance. These programs usually utilize a device or a phone app that will track aggressive braking and acceleration along with the times of day that someone is driving. A lot of these will give the policyholder a report that shows the driving habits of each driver. This means that the parent can qualify for a discount, while also having a sneak peek into the driving habits of the young driver.
• Take a Driver Safety Course: If each person on a policy takes a driver safety course, they will qualify for a discount there as well. This can be yet another way to cut costs on an auto policy.

Be sure to keep the driver insured

When faced with the drastic price increase that comes along with adding a young driver, or having a driver leave to go to college, a lot of people turn to unconventional methods of cutting costs. You should never leave a young driver uninsured. Some individuals may attempt to remove the young driver from the policy altogether when they leave for college if they keep their vehicle home. The issue with this is that the young driver will have a long lapse in coverage and no insurance history when they go to get insurance for themselves in the future. Best case scenario, this will result in difficulty finding auto insurance that is affordable and available for them. Worst case scenario, the driver gets into an accident that is not covered due to them not being listed on the policy. Either way, there is no positive outcome to these types of solutions. Every driver needs to maintain auto insurance constantly in order to be properly protected and set up for the future.