Jul 25, 2024 3:42:36 PM | Education Helping Clients Navigate Auto Insurance Adjustments When Their Kids Go to College

As insurance agents, it's important to guide your clients through the various changes that come with life milestones. One such milestone is sending a child off to college, which can significantly impact auto insurance premiums. Whether the child is leaving their car behind or taking it with them, understanding and communicating these potential changes can help your clients save money and avoid unwelcome surprises.

Lower Premiums When a Child Is Away Without a Car

When a child heads to college more than 100 miles away and leaves their car at home, parents may qualify for a notable reduction in their auto insurance premiums. Many insurance companies offer a “student away at school” discount, which acknowledges that the car won't be used regularly, thereby reducing the risk of accidents and claims.

To help your clients qualify for this discount, make sure they provide proof of their child's enrollment in a distant college or university. This proof typically includes:

• A copy of the student ID
• A copy of the class schedule
• A letter from the school confirming enrollment and location

Informing the insurance company of this change can lead to significant savings on premiums, easing the financial burden of college expenses for your clients.

Updating Policies if the Child Takes the Car

If the child takes their car to college, clients need to inform you, their insurance agent, about the new location. The car’s new zip code can greatly impact insurance rates due to factors like local traffic, crime rates, and accident statistics.

Failing to update the policy with the correct zip code can result in complications when filing a claim. The insurance company might deny the claim or adjust the premium retroactively, leading to unexpected costs. Advise your clients to:

• Provide the new address where the car will be parked
• Update the car’s registration if necessary
• Discuss any changes in coverage needs based on the new location

Making the Most of Available Discounts

Beyond the “student away at school” discount, other discounts can also help your clients save on auto insurance when their child goes off to college. These include:

• Good Student Discount: If the child maintains good grades, typically a B average or higher, they may qualify for this discount.
• Multi-Policy Discount: Bundling auto insurance with other types of insurance, such as homeowners or renters insurance, can lead to additional savings.

Conclusion

Sending a child off to college is a significant life event that brings many changes, including adjustments to auto insurance policies. By understanding how a child’s new location impacts premiums and taking appropriate steps to update the policy, your clients can potentially save money and know they have the right coverage in place. Whether the child leaves the car at home or takes it with them, effective communication between you and your clients is key to maximizing available discounts and avoiding surprises down the road.