How do you insure student drivers away at US colleges?

Having your child go away for school is an exciting yet daunting venture. To make getting around easier, you may have decided to provide them with one of your cars, or they might be taking their own. 

If your child is heading off to university or college in the U.S., it’s important to understand the following details about their car insurance. 

Ontario auto insurance doesn’t account for people who live abroad but still maintain their Canadian citizenship/residency. Despite this, having an Ontario auto insurance policy means you’re still covered while travelling anywhere in Canada and the U.S. – for a certain period. 

See, while auto insurance you buy in the province is valid anywhere in Canada and the continental U.S., meaning you can drive wherever and still be insured, there are limits. Being away for six or more months implies a change of residency, so you would need to prove that you’re still a resident of Ontario and therefore qualify for Ontario auto insurance. To do this, you should  bring the car back periodically – ideally once every six months. For a student, this can be during their reading weeks or breaks. 

With most insurance companies, having the car out-of-province for longer than six consecutive months will void the terms of your policy. You may be required to find a new insurance company, such as one that allows more than six months of consecutive travel. Ask your broker about which companies offer this. 

Having your child driver on your policy will increase your rates, as insurers will consider their inexperience and driving history (or record, if they’ve had any scrapes or violations.) But when that student takes the car and goes off to school, will premiums rise as well? 

Not usually, because the rates would still be based on the home address. It technically doesn’t matter where you drive or where your typical “spots” are, but commute distance/annual mileage can be a factor in pricing. If those change, you may need to ask your broker about the recent shift and how your insurance could be impacted. Also, if your kid picks up a part-time gig, like driving for Uber or Lyft, there will need to be a chat with your broker as well as this has altered the usage of the car.  

Car insurance can be a tricky subject if your student child is taking their own vehicle or one of the family cars away to school, so it’s important that you’re aware of your policy’s limitations. Here are some of our recommendations to ensure you’re avoiding voiding the terms of your policy while saving money: 

To maintain an Ontario auto insurance policy and save your student driver from having to purchase a policy for whatever state or other province they’re in, the insured car will need to be brought back to Ontario once every six months. 

You will need to provide proof of having returned the vehicle to Ontario, however. Our recommendation is to get a service job done while you’re visiting Ontario, such as having an oil change or getting your tires swapped. Make sure to keep a receipt of the service you received to show to your insurer as proof of the car being in the province!  

If you’re still financially responsible for your child, a good way to cut costs on car insurance is to have your child insured under your policy and the vehicle (regardless of if it’s technically one they’re borrowing from you or theirs) registered under your name. This way, you can qualify for a multi-vehicle policy, which can save you up to 25% simply by bundling the vehicles into a single policy. 

Of course, the amount saved varies by insurer, so be sure to ask your broker about this option. 

Car insurance is just one piece of the bigger picture that is protecting your student while away at school. While insurance won’t prevent things from happening, it can act as a safety net for your child (and you) if they do. 

A misconception that often arises when students go away to school is tenant insurance. Children whose parents are still financially responsible for them need not necessarily buy their own tenant policy; instead, they can be covered under a parents’ policy. Home policies do cover children away at school, even if they’re in the U.S. (although check with your broker as some limitations may apply.) Most policies include between 5,000-25,000 contents coverage for children away from home. If necessary for a lease, you can ask your provider for a certificate of this inclusion and show it to the landlord of whoever your child is leasing from. 

An umbrella policy is essentially a kind of “catch-all” policy that exists to extend the limits of home and auto coverage. It isn’t a standalone policy and generally a minimum level of home and/or auto insurance is required before umbrella insurance can be purchased. For a student attending college or university away from home, an umbrella policy is recommended. 

Why? Because anything can happen when kids are away at school. Parties, accidental injuries, parking lot collisions – to name a few. Kids often let loose a little when they’re away from home, so it’s a good idea to have some of the extra peace-of-mind that an umbrella policy provides. If something happens and a home’s policy limits end up being exhausted, the umbrella policy kicks in to cover the additional costs. It can keep a family from going bankrupt over something as small as a frat party gone wrong. 

Keep in mind that adding any coverage will increase your premiums. However, it’s always better to be prepared for unforeseen situations when your child is going away to school and living on their own for the first time. 

Having a child go away for school can be an exciting time, but it can also be stressful. Working with a Mitch Insurance broker can alleviate some of your stress, plus they’ll be able to recommend some insurance coverage that might be of help to you in your situation. Our brokers are happy to help whenever you need us.