5 car insurance mistakes when kids go to college

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In addition to finding extra-long sheets and getting the best deal on college textbooks, parents should also evaluate their car insurance coverage before sending their student off to college.

Many parents overlook car insurance discounts and make coverage errors that end up costing the family extra money. And anyone who has ever paid college tuition knows that parents of college students need to save every dollar that they can.

Here are five common auto insurance mistakes that parents of college students make.

1. Not asking for a good-student car insurance discount

Many major auto insurance companies offer a discount for students who receive good grades, up to a specific age, typically 21 or 25.

The grades required and the amount of the discount varies by insurance company.

“Many parents think that you must continually get good grades to qualify for the discount,” says Larry Thursby, vice president at Nationwide Insurance. “However with Nationwide, you only need to show proof of one semester of good grades. Even if that is the only time in their life that your student has earned high grades, they still qualify for the discount.”

2. Dropping insurance coverage for students who leave their car at home

Even if your student is not taking a car to college, you should continue coverage. Many companies have a discounted rate for students who are away at a school and at least a certain number of miles from home, typically 100 miles.

“When they come home from school on breaks, you will still want them to be covered,” says Kevin Conlee, director of auto line management at Allstate. “Additionally, if they go without insurance, they may have issues getting auto insurance down the road, since many companies require continuous coverage.”

3. Assuming your college student will make safe driving choices

While you most likely have been encouraging safe driving since the day your teen got a driver’s license, you will no longer be around to give reminders. And big driving mistakes, like causing an accident or driving while intoxicated, can dramatically affect your family’s auto insurance rates.

Each time your student dings the family’s insurance record, rates on all your vehicles will rise.

One way to reinforce responsible driving is to ask your college student to sign a safe driving contract, such as Liberty Mutual Insurance’s Parent-Teen Safe Driving Contract.

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4. Failing to compare car insurance quotes for putting the teen on their own policy

Many parents assume that they should keep their child on their family’s policy, while others automatically purchase a separate policy for their student.

Insure.com’s research has shown that it’s generally less expensive to keep a student on the family’s insurance policy, rather than putting him or her on a separate policy. But you won’t know for sure until you ask your agent to run the quotes.

If you are living in an urban area with high insurance rates and your child is going to school in a rural area, it may make sense to put the student on his or her own policy.

Or if your child has racked up a number of tickets or accidents and is raising the rates for the entire family policy, a separate policy might save you money.

“If they are on the family policy and the family has four vehicles, then the student’s incidents impact the rates of all of the vehicles and it may be cheaper to isolate the student on their own policy,” explains Thursby.

5. Not establishing rules for lending the car to friends

It’s common for college students to let their friends and roommates borrow their cars. But that’s a bad idea.

If your student hands the keys to a friend and the person gets into a car accident, it will be your family’s insurance rates that are affected.

“The insurance follows the car. If another student gets in an accident in a car that is covered on your policy, then it is going to be your insurance at play, not his family’s,” says Rosanne Hamblin, a Liberty Mutual Insurance representative.

Although your days are busy with preparing for the transition to college, some attention to your car insurance policy can save you money and headaches.