Collegebound students can save you car insurance costs
Millions of families struggling to pay college tuition are neglecting to take advantage of an opportunity to reduce their bills by thousands of dollars a year by making a single telephone call. Insurance industry officials say almost half of all parents of college students forget to reduce their car insurance when a student leaves for college and thus continue paying as much as $3,000 unnecessarily.
"It's a hefty savings, and our surveys show 47 percent of parents have forgotten" to make the phone call that could save them $100 to $200 a month, says Madelyn Flannagan, vice president of education and research for the Independent Insurance Agents & Brokers of America.
Of course, some strategies can maximize savings:
- Students must leave their cars at home. Those who take cars to college may actually face higher bills if they are moving to a riskier area.
- The biggest savings will be reaped by students who were previously listed as a "primary" driver of a family vehicle and can be reduced to an "occasional" driver because they are away at college.
- Because boys' car insurance bills are higher, they will see the biggest savings–cutting a $5,000 annual bill to as little as $1,500, estimates Robert Page, a vice president of the Professional Insurance Agents and an agent in Houma, La. Girls' bills should drop by 30 percent to 40 percent.
- Even students previously listed as "occasional" drivers can cut costs by telling insurers that they will drive only the parents' least expensive car. "When they come home, they are only going to drive the Hyundai," Flannagan says.
Once the student graduates from college, families can cut insurance bills even further. Not only should the students take full responsibility for car insurance bills, but parents can reduce their life insurance policies since they no longer have to worry about funding tuition.
"Once the child finishes colleges, that's where you realize the big savings," says Page.