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Your child left for college? Take Insurance Tips 101

Auto coverage: Steer toward price breaks 
Congratulations if your college student left the car at home. You might have some savings coming to you. But to get it, your student's school needs to be at least 100 miles away. If you meet this criterion, give your insurer a call. You'll generally get about 10 percent off your premium.

Did your kid leave with the car? Then be forewarned, says Jim MacPherson, spokesman for AAA Allied Group, a chapter of the Automobile Association of America. "Insurance companies generally don't like students to take the car. They could conceivably raise your rates if the vehicle's moved to a different location. It's best to check with your insurer ahead of time."

What if you don't bother telling your insurer? Then you place your family's auto insurance at peril, and you risk losing coverage altogether.

"The first thing insurers ask when someone files a claim is 'Are we really on the hook for the claim? Is this policy valid?' You could complicate matters in a very serious situation if you've been suggesting that the car is being used by a student in rural Indiana when in fact it's been driven in downtown Boston," says MacPherson.

To simplify matters, it's often best to re-register and insure the car in the student's name so the location of the policy is accurate. If your son or daughter does opt for his or her own insurance, shop carefully to get the best deal.

Getting the best auto coverage for less:
  • Ask for a discount. It pays to boast about academic achievements. You could snag a "good-student discount" -- usually worth 5 percent off annual premiums -- given to those who maintain a 3.0 grade point average. (That's a solid B on a 4.0 grading scale.) Also, if you're in the market for renters insurance, as well, consider buying it from the same company that insures your vehicle. You could get a multiple policy discount of 5 percent to 10 percent.

  • Skimp on collision coverage. if your student drives a clunker. Look at your insurance policy. Up to 50 percent of the premium might be for collision coverage. Is it really necessary? If a student is driving the family's old Buick and you can afford to replace the vehicle in the event that it's totaled, it might not be worth keeping collision coverage.

  • Load up on liability. Experts universally sound the same warning: It's not the fender-bender you need to watch out for, it's the lawsuit. Be sure your student has adequate liability coverage. States mandate a minimum amount of liability drivers need, but even these regulations are "often woefully inadequate because they (lawsuit judgments) can go after a student's future earnings," says MacPherson.

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