Student Auto Insurance Myths Debunked

Rising tuition fees, growing credit card debt, and a weak economy are forcing many parents and college students to skimp on car insurance. With the assumption that auto insurance for young drivers is too expensive, many Americans are actually getting themselves in more trouble. Experts argue that car insurance is even more important for inexperienced young motorists because they have yet to build up good driving records.

To help parents scale back their expenses for their children’s car insurance policies, industry sources have come up with answers and explanations for popular misconceptions and inaccurate notions.

Contrary to popular belief, college students do not need to have auto insurance policies of their own. Policyholders can actually add young motorists in the family as additional drivers. While the parents may have to add a few hundred dollars, this option can save them thousands. On average, a new insurance policy for a college student with no prior driving experience can reach the $2,000-mark. Of course, the additional driver should list the same address as their primary residence.

College students who do not have cars of their own are highly recommended by experts to get car insurance anyway. According to experts, most Americans fail to understand that auto insurance covers the policyholder, and not the actual cars themselves. With car insurance coverage, college students will be protected at all times, especially when they use their friends’ cars. Buying a young motorist insurance later on can reduce the likelihood of him or her getting better premiums in the future. Providers always look at a policyholder’s driving record to come up with rates. More extensive driving experience can mean better premiums.

Parents who want to save on insurance usually purchase “liability only” coverage for their young drivers. While sufficient to cover the minimum liability amount required by law, this particular option can result to more out-of-pocket expenses if there is a need for repairs or hospitalization. Newer cars must also be given collision and comprehensive coverage to protect policyholders from paying substantial amounts if they get into accidents. Policyholders can end up shelling out thousands of dollars for repairs if the amount of damage exceeds the maximum liability limit covered by the insurance company. To avoid this, experts advise buying additional coverage options.

Car insurance for college students need not be too expensive, experts contend. Students who do well in school and have grades to prove it can qualify for “good student” discounts. This discount is often offered to young drivers considered responsible enough to be entrusted with a car.