Recently a Families.com member asked me about adding a college student to personal auto insurance:
My son got his driver license this summer and is now in an out of state college. He is not going to drive while at school. However, when he is back for Christmas or Summer (may be for two to three weeks), he will drive our car. Should I include him in our auto insurance? Or should I include him in our auto insurance only during the period when he is back? Some agents claimed that including him all through the year will help him in the long run. That is, when he has to get his own car and auto insurance some day, it will be cheaper for him – because “he has apparently more experience”.
There are several reasons I would advise that you add your college son to your insurance policy as a household member. Insurance companies base the premiums on the number of miles a person drives to and from work, or if a car is only used for pleasure. Most insurance companies will consider college students who live more then 100 miles away from home without the use of a car as a lower risk.
Another important thing to consider is that most college students will be considered your dependent and parents are required to complete financial aid forms until:
- Graduation with a four year degre,.
- Marriage, or
- When they join the military.
Most parents continue to claim their college students on their personal income taxes until their child is earning their own living and paying their own taxes. This means that in the worst case scenario if your son were to drive and have an accident you may be the one sued for the liability of your dependent child’s car accident. Children away at college may not have the use of your car, but that doesn’t mean they won’t be driving a friends car.
The agent’s advice about “experience” isn’t related to driving, it’s about insurance experience. Insurance companies always charge lower premiums when someone has had insurance in force for the past year. Someone who has not been insured for a long period of time will always pay a higher insurance until the company can determine what kind of risk the driver actually is. Once an insurance company has “experience” with a driver they will lower the rates. That experience will also follow the driver from one insurance company to another.
Adding your son to your own policy will give him lower rates now, because your company has experience with you. When he is ready to be independent and your risk of being responsible for his liability ends, he will have prior insurance coverage and not have to purchase insurance as an unknown risk to a company and pay higher rates. The difference in cost to him later can literally amount to several hundred dollars a year for basic liability coverage.
I always advise parents to name their college students on their personal auto insurance policy. Primarily, because of the liability he is for you personally as a dependent and in part because of how much more affordable insurance will be not only in the future but, right now. One way to see this difference is to ask your agent to give you a few quotes. For example ask what your son’s insurance would cost if your purchased an old beater and covered it for liability only as part of your household under your policy and then ask the agent to quote the same car for your son on his own with no prior insurance.
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- When To Drop Your Child From Your Auto Insurance.
- No Car? Do You Still Need Auto Insurance?
- What is Insurance Credit Scoring
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