If you have a son or daughter heading off to college in the next few days, take a moment to discuss the following car insurance related topics before they head off to school. These can have a financial impact on your family’s car insurance rate or a surprise liability claim. We’ll also look at a couple of things to review that can lower what you pay.
Friends Driving Their Vehicle: Most students may not think letting a friend or roommate borrow their car is a big deal, but it can be! Here’s why; what happens if the friend is involved in an accident, regardless of who’s at fault. Any time your son or daughter allows one of their friends to drive their car, they put the family’s car insurance at risk. Here are three points to remember and share with your son or daughter.
- The moment a car is loaned to someone else, that driver becomes a permissive driver.
- Insurance follows the car, not the driver. If the friend is involved in an accident, it will be your policy that’s liable not the friend’s.
- A permissive driver can also put you at financial risk if someone is hurt or killed because of the accident.
Accidents and injury claims will impact your rate with most car insurance companies for 3 to 5 years depending on the carrier.
Grades Still Matter: Why pay more for car insurance than you have to? Remind your son or daughter good grades lower the cost of car insurance by a couple of hundred dollars a year! Students with an A/B average earn a discount for good grades. A copy of the most recent transcript will need to be presented to underwriters to receive this discount or keep it on the policy.
Students With No Car: Most car insurance companies offer a discount if the student attends a school 100 or more miles away from home and does not take a vehicle with them. The reason for the discount is the student doesn’t have a car with them which reduces their exposure for being involved in an accident. If this fits, take advantage of it!
Geographical Rating: Those students who attend a school in a smaller community than the one they live in may help reduce the premium by rating that vehicle with the school’s garaging address. For instance, if the family residence is in Houston, Austin, or the Dallas / Fort Worth area and the student attends school in Lubbock, College Station, Abilene, Alpine, Waco, or another smaller community, change the garaging address of their vehicle. This will lower the premium because it’s located in a smaller community with fewer cars, and therefore, less chance of being in an accident.
This does not work as well if they attend school out of state (Oklahoma, Arkansas, etc.). That would require registering the vehicle in that state with your daughter or son as the only person on the policy, which will increase the rate. It may be less expensive to just keep them on the family policy than rate them on their own policy in a different state unless they are on their own.
What do you think? Share your questions, comments, and experiences with me on my Facebook, Google +, or LinkedIn, pages. I’d love to hear from you!