DD is planning to buy and bring a car to college. I am looking for suggestions on the best and cheapest way to handle it
She is going out of state, should the car be in her name? does she need to change her driver’s license and put her dorm address? How do I report it for insurance purpose? Say last year, from reading this board, I found out that I can lower the insurance by changing her as away to college. If she were to use her car for college, can I remove her from my car insurance?
thanks
How car insurance works varies a lot by carrier and/or by state.
Generally, if she buys the car herself, and is the registered owner, she will need to get it insured. But it would mean you could remove her from your policy. But a policy she buys will likely be more than you adding her to your policy - she is in a higher-risk age, more likely to be in an accident (unless you are in your 70’s or older).
If you buy it for her and register it in both names, most policies will not give a discount for her being away at college if she has the car with her.
I would suggest talking to the admissions office at her college, to find out how most students with cars handle it.
Be careful if you do get her a policy of her own. Many people are under the impression that by the car being in their child’s name with their own policy it shields them from liability. If she remains a dependent, keeps her permanent address at your home, etc. you can still be pulled into a lawsuit/claim. Where this becomes a problem is in trying to insure the car cheaply and purchasing low limits of liability coverage. This does save premium but if the accident exceeds the bare bones limit they will come after her and ultimately you. I would make sure her policy matches your policy in terms of coverages.
When my S and D brought a car to college (both were out of state) we kept the car in H and my name, kept the car registered/licensed at our permanent home, and left the kids on our insurance policy. The kids kept their license address at our home. We informed the insurance company that our child will be taking the car to college and it was no problem (perhaps there was an additional charge – I don’t remember). It is my understanding that college is regarded as temporary, not a permanent change or residence. I would call your insurance company to discuss.
We just bought our youngest a car. I called our insurance agent first (AmFam) and the quote was for $300/mo. Okay, we knew there would be a cost. Ugh.
Once he came home from school and we started shopping, I talked more in depth with the agent. It was far better for DH and I to own the car and son to be an authorized driver. His car is under our policy but the car is “garaged” in another state (where his university is.) Until he is fully on his own, we will cover him under our policy. It’s all perfectly legal and above board- the car is just registered in our name. (It’s also covered under our umbrella policy.)
Actual cost was $100 less per 6 months by adding a car that son is the primary driver for…!
We also had the cars in our names, and we were all authorized drivers. I made sure the insurance company knew who the primary driver was on each car, and also where the cars would be the majority of the time.
She should not change her driver’s license to her dorm address. Her dorm address will most likely change every year. My D didn’t change her address until she started grad school - and part of the motivation was she is in grad school in a state with no income tax
Lowering the insurance when a student is away at college is typically only applicable if they won’t have a car on campus. The reason the insurance can be lower is if they are away at school with no car, the odds of their getting into an accident in a covered vehicle are lower. I can’t think of the term the insurance company used but it was basically listing them as a part-time driver.
If you plan on removing her from your insurance, does she have a means of paying her car insurance, since she would then have to get a policy of her own? It will likely cost more for her to have an independent policy than for you to keep her on yours.
Every year your kids age, the cost of their own policy will decline as they gain driving experience.
But for a new driver it is usually cheaper to keep them on your policy. If they are moving to a very low cost state
with very favorable terms for young drivers, then you would have to see if they will treat the kid as in-state while living in a dorm. If they get an off campus apartment that might be more feasible.
No harm in calling an agent in the state where the college is located and asking for some advice and quotes.
My kids go to school in-state so we just discussed with our broker and he said it was cheaper to keep one policy than two, for now.
Thank you everyone. You are so quick…
I am going to put the car in my name (as I will pay more than half ) add her car to my policy and talk to the agent, but is it possible to remove her from my car as she won’t be driving my car? If I remove her name from my car, will it be possible for her to drive occasionally? (as an aside, can a friend drive my car occasionally?)
This is not true in CA. See here for more details:
https://www.mwl-law.com/wp-content/uploads/2013/03/parental-responsibility-in-all-50-states.pdf
Back to the OP’s question: Each state/insurance company/individual policy is different. It’s hard to find a “one size fit all” answer. Discuss this with your insurance agent. If you have a good one (I do), (s)he will try to find the best solution for you.
Will she be able to drive your car? Probably. But ask your insurance folks for the specifics related to their coverage.
Our son had one of our cars, in our name, insured by us…during grad school out of state. He never drove that car when he was home. He drove one of the cars that was here. But our policy covered him to drive any of our cars.
Our insurance agent recommended we keep the car in our name, even though the car was going to living in another state with our kid while she was at school.
This does seem to be state/ins compnay variable. Our kid will be at school in a different state to us this year but as he is a uni student and we own the car, he stays on our insurance, and he is not insured to drive our most expensive to insure vehicle, but we will leave him on the ordinary vehicles for when he comes to our home. He lives off campus and is self supporting with his job, so I was surprised this worked out.
We were told to put the cars in our kids names and buy them insurance in their state (CA). Our HI policy didn’t apply to cars out of state. We did it.
We did get good student discounts, which helped. It was also helpful that the kids had their permits for years before getting the policies.
When we told the insurance company that both kids where at college, they lowered the rates (substantially), even though they where bringing cars to college. In our case, the insurance company assumed the students (living off campus) would have to commute to college via bus, bike, and/or park and ride as parking is limited/restricted on campus… Finally the lack of student parking at UF pays off…
All of the above are good points, but let me add one different consideration. If your child is going to try and establish independence for purposes of financial aid down the road, then buying a car and putting in their own name, getting their own insurance, and changing their license address to their address at college are all possible steps towards doing so. No one step is magical in this process, but before you make any decisions based solely on what is cheaper or better at the moment, think about what your likely plans down the road are going to be, and perhaps talk to a financial aid advisor at the college and your tax advisor, especially if your kid plans to attend graduate/professional school.
We have to list a primary driver for each car, but everyone can drive any car on our policy. IOW, our kids can drive our cars occasionally. My D’s car is very small so when she’s home she occasionally borrows one of ours if she needs more space.
As far as her driving your car, do check with your agent. In some states/with some companies, if family members are to drive a vehicle they must be listed as a driver on that car or they won’t be covered. She doesn’t have to be listed as a primary driver though - it’s less expensive if, for your car, you are the primary driver and she is an intermittent driver.
every company is different. I have called and called and called about this all with my kiddos, and no matter what all kids are placed to drive on all of our cars. It is very pricey, even without full coverage on the old cars that the kids drive. I would love to hear how it all works out as I’m always looking for new ideas on decreasing insurance costs.
For reference… when my 20 yr old got into at fault minor accident ( under her own separate insurance policy)… the other driver claimed serious injury(debatable… no outward sign of injury in fender bender…long story)He threatened to sue… looked into whether she had any trust funds etc. (not) since they couldn’t come after our assets. Eventually they just settled with insurance company. Was SO glad she had separate insurance.
^^^ And that’s why insurance companies employ an army of lawyers. I rolled - seriously, just rolled, into another car once. The woman and I discussed how trivial it was and she even said she wasn’t the kind of person to take advantage. Next thing I knew I was being sued! I spent a lot of time talking to the lawyer and was prepared to go to court when they finally settled it for $5K, which the insurance company paid. I was annoyed she even got anything, but it would have cost the insurance company more than that to go to court. The outcome of the suit did not impact my premiums any differently than if I hadn’t been sued.
Some people need to be reminded it’s not just “the insurance company’s money” - it’s real people’s money.
Even when an accident is at fault, that doesn’t mean the injured party gets to treat the at fault party like a cash register.