College Daze part two…
In my last post I was talking about how my friends could cover Pat’s contents while he is moving them to school and then in his dorm or an apartment. His father also asked can they save money while Patrick is away by temporarily taking him off the policy. Or now that he is in college is it time to get him his own auto policy?
The first question was should you change your auto policy if your child is away at school? A lot of parents think this is the time to save a little money and take Junior off the family policy. But you are making the assumption that your child will not drive from August to May. What about when he is home for Thanksgiving and you send him over to pick up his grandparents for dinner or to get a pint of whipping cream from the grocery store. Or she is studying at school for midterms and the girls all get the munchies. One of the other students has a car and offers your child the keys to go on a McDonalds run. If you take your student off of your auto policy you have at least reduced if not completely removed their coverage when driving your vehicles and they no longer have your policy to fall back on if their friend has no insurance or low policy limits. (Don’t forget your policy needs an inexpensive endorsement so they can be covered properly when they drive their friends cars).
Many states regulations won’t allow you to remove a child who is still considered a resident of your household. Where does your student have their driver’s license and if applicable vehicle registration mailed? Where are they registered to vote? Where is their tuition bill sent? These are indications of a young person’s primary residence.
You can often reduce your auto policy by looking for credits. Did your young driver take Drivers Ed? Do they maintain a B average or a 3.0 GPA? Are they away at school as a full time student over 100 miles from your home? These are all credits that will reduce your premium on the vehicle they are assigned to. And if you have more vehicles than drivers, they can be made an occasional operator instead of a principle operator and that will reduce the premium too.
Now, should you take your student off the policy, register a vehicle to them and let them insure it themselves? Probably not, even though they are over 18 and in school. Why, because they are still considered a household member. So if they have an accident and the case goes to trial, a judge would expect a prudent parent to require their child carry as much insurance as they do. And if they are going to carry the same limits you do, why not give them the benefit of all the credits you are entitled to… Multi car credits, multi policy credit for having your home and auto with the same company, renewal credits and multi years of safe driver credits are all savings you are probably eligible for that your child wouldn’t qualify for on their own policy. It will be cheaper to keep your child on your policy as long as they declare your address as their primary residence.
What about the liability, you ask, won’t I be responsible for my child’s accident if they are at fault? Unfortunately, if they are living at home, the courts will likely look at you, their parents, until they move out and establish their residency elsewhere whether they have their own policy or not. And by keeping them on your policy you can make sure they maintain coverage and good limits by making sure your policy stays in effect and that you carry good limits. You may even consider increasing your limits while they are on your policy.
I don’t know if Pat’s parents are going to survive him going off to school. His mom is still worried he won’t get enough sleep and his dad is dreading the 4 to 6 hour trips to take him back and forth for long weekends and school vacations. But after talking to their agent, they feel more comfortable about his property and auto risks while he is away.