How getting good grades and staying on a parent’s policy will help students pay less for auto insurance

Good grades and staying on a parent's policy can help lower auto insurance rates for students.

Car insurance for students, like insurance for any young driver, is expensive. But there are some advantages students have while they’re in school.

Student car insurance considerations are usually only valid for individuals under 25. Older, non-traditional students generally aren’t subject to these conditions (or eligible for student discounts), even if they go to school full-time.

Good Grades Can Improve Insurance Rates

There are very few things high school drivers can do to keep their insurance premiums down. Statistically speaking, they are among the highest-risk drivers around. Even an otherwise modest liability-only policy can be very expensive for them – same thing goes for learner driver car insurance or car insurance for teens.

Even so, students can limit their insurance bill. Staying out of accidents is the most important thing they can do. But maintaining good grades is a close second. Most companies offer good student discounts of up to 20 percent for high-school age students. The good news is you don’t have to be the valedictorian to be eligible. A 2.0 GPA is usually all that’s required.

Students can document good grades by providing a current transcript or letter from a school to the insurance company. What’s more, good student discounts often extend to college-age students under 23.

Try Keeping Student Auto Insurance At Home

Many insurance companies allow a child to stay on his or her parent’s policy past age 18 if they are a full-time college student. This usually lasts until the child leaves school, gets married or turns 23, whichever comes first. Specific requirements can vary widely from company to company – so always check with your agent or broker.

Because a parent’s policy often offers discounts that a student could not usually get – like longevity and multi-car discounts – it’s often a good idea to keep student car insurance on the parent’s policy as long as possible.

Special Situations for Student Car Insurance

One caveat to staying on a parent’s policy: if the student goes to school in a state where the parent’s insurance company doesn’t do business, there may be an issue with staying on the parent’s insurance.

If the insurance company discovers the out-of-state student, they may drop the student and force them to insure separately in that state. There may also be a problem if there’s a claim. Be sure to check with your agent or broker if this is an issue.

Even if the student is forced to go it alone, maintaining constant coverage should remain a priority. Any gap in coverage may force the student into a high-risk company later – even with a spotless driving record. This could make a bad situation worse. It certainly doesn’t hurt to shop around. The good student discount and other discounts may still be available to them.

Things to consider when insuring an exotic, high performance, or other sports cars – such as raised limits, stated value, and more.

Don't forget coverage for your sports car before you drive off the lot.

There isn’t that much difference between insuring a sports car and any other car. But there are special considerations when dealing with sports car insurance.

In most cases the basics remain the same. All sports cars need to be insured to satisfy state liability requirements and any lienholder requirements for full coverage. This is particularly true if a sports car is intended to be driven rather than just looked at.

Raising Limits On Sports Car Insurance

Sports cars aren’t cheap. Insuring them isn’t cheap, either. Most companies consider sports cars to be significantly higher-risk models compared to run-of-the-mill SUVs and sedans. Premiums can therefore be quite expensive, even for low-risk drivers. This has nothing to do with the color of the car (the notion that a red sports car costs more to insure is a myth), but with the model itself.

Also, insurance costs may vary widely among different models of sports cars. For instance, high performance car insurance can be very expensive, while car insurance for other vehicles is cheaper. Each car and driver is quoted differently. Rates can also vary greatly between companies on higher-end vehicles – that’s why you should shop your rate.

You should also keep liability limits on actively driven sports cars high higher than state-mandated minimums. Sports cars attract attention across the board. This attention is not always welcome. If your sports car is in an accident – especially if you’re at fault – you are more likely to face litigation than if you just drove a Ford Focus. If that happens, you’ll be glad you had those higher limits.

The same holds true for material damage. Even when a sports car is paid off and the bank no longer requires full coverage, there’s probably a lot of intrinsic value in the car. Keeping full coverage after payoff is usually a good idea.

Consider Stated Value on Your Sports Car

Traditional sports car insurance may not be enough for older, collectable sports cars or expensive high-end models. For a typical auto insurance policy the vehicle’s value is determined by blue book and other market-driven factors. This may not translate well for classic cars or exotic models where a stated value policy may be more beneficial. In such a case, classic car insurance or an exotic car policy may be a better choice.

There are special considerations for these policies as well. For example, a classic car insurer may decline to insure a vehicle that is regularly driven, even if it qualifies otherwise. Consult your agent or broker for more information.

Why you need auto insurance with your learner driver permit and what to do about it

Learner driver permit holders need car insurance.

Congratulations on getting your learner driver permit! The question to ask now is: do you need insurance to drive now?

Even at this stage in your driving career, the answer is an absolute “yes” in all 50 states. All drivers and all vehicles must be insured — no exceptions.

But how exactly is this done? How do you get learner driver car insurance?

Sometimes it’s as simple as understanding car insurance for teens. But often the specific answer varies greatly depending on situation, company, and state.

Learner Driver Car Insurance for Teenagers

If the driver is a teenager, learner driver auto insurance is best acquired by placing the new driver on a parent’s policy. The insurance company will need the learner driver’s state-issued license number and a vehicle to place the driver on.

This can be a tricky proposition. Some companies insist on placing the highest-risk driver on a policy on the most expensive car – you’ll have to check with your agent or broker.

The ideal situation would be to place the teenager on an older, paid-for vehicle with liability-only coverage. Make no mistake – this is going to be expensive no matter how it’s done.

Even so, given the big expense of insuring a teenager on a full-coverage policy on a newer vehicle, it might make financial sense for the family to buy an older car to insure their teenager. Naturally, check with an agent to make sure this is feasible for your particular situation.

Learner Driver Car Insurance for Adults

The situation is a bit different for adults who are driving for the first time. Many companies will take an adult driver on a learner permit in their high-risk company. Being placed in high-risk is due both to their lack of driving history as well as their lack of insurance history. While this can be expensive, many adults can move to a less expensive standard company after six months if all goes well.

An option an adult may consider for learner driver car insurance is a “non-owned” policy. This is a liability-only policy that covers only a particular driver and not any particular vehicle. A non-owned policy satisfies state liability insurance requirements and at the same time starts the clock on the driver’s insurance history sooner than later.

To qualify for a non-owned policy a driver must not have a car registered in his or her name. Otherwise the company will require the policy to be written on that car, even if it’s not the car being driven.

When You Get Your Full License

It stands to reason that an insurance company will not continue to insure a driver on a learner’s permit indefinitely. The driver will need to show proof of obtaining a full license in a timely manner to avoid cancellation. Most companies will allow a few months for this.

No company will wait around forever. You should provide the insurance company your full driver’s license information as soon as possible to avoid any problems.

How kit cars are different, insurance considerations before and after building your own car.

Don't forget to insure your kit car before you start building!

A kit car may be the ultimate do-it-yourself project. It allows the hard core car enthusiast to build their own car from the ground up. But as with any car, kit cars need to be insured.

Given the unique nature of the kit car process, it’s insured differently as well. There are several kit car insurance considerations you wouldn’t even consider with standard factory-built cars.

How Kit Cars Are Different

Perhaps the important difference between kit car insurance and other types of auto insurance is the “builder’s risk” aspect of it. Whereas a standard automobile is built in a factory somewhere, and a classic car is built in a factory a long time ago, kit cars are by definition built by private individuals.

Auto factories carry a form of commercial insurance to cover their building process to protect against theft, damage and other perils that may hinder getting the finished product. In the same way, individuals constructing kit cars should insure during the building process as well.

Insuring the Kit Car Build

You should consider insuring a kit car before the first part is ordered. This provides coverage for such things as missing or damaged or parts during the building process. Without this coverage, a mishap involving parts could completely stop the build. After all, how much more useful is an unfinished kit car versus a totaled car?

Both cars just take up space.

Many traditional property and casualty insurers won’t insure kit cars (although some do). Even if your normal company doesn’t insure kit cars, they may have access to a kit car insurance market through a broker.

As with classic car insurance, there are several companies that specialize in the kit car insurance. Alternatively, you can shop for kit car insurance online. Check with your agent or broker for more details.

After Building Your Kit Car

Once the kit car is built, it’s insured in much the same way as a classic car. Material damage is covered at a stated value (generally the total amount spent to build the car) while liability is a secondary concern at best. State minimum liability limits must be satisfied to legally drive a kit car on the road.

If the car is meant to be primarily a display piece it’s not absolutely necessary. As with classic car insurers, most kit car companies won’t insure the finished product unless it’s used for primary transportation.

Things to consider when insuring high-performance vehicles and when to look at exotic coverage

What you need to know to insure this beauty!

High performance car insurance operates much the same way as car insurance for any other car. But it’s not cheap.

That’s why shopping around is even more important. It may even land you a good deal.

How High Performance Car Insurance Works

You need to understand the basics of insurance underwriting before seeing how high performance car insurance works. Basically, insurance underwriters rate risks based on cars, drivers, and hundreds of other factors. If the company decides to take on your risk, they assign a premium to the new customer – and you get a policy.

Since the type of car is a factor for underwriting, some automobiles cost more to insure than others. Rates differ from company to company, but high-performance sports cars like Vipers, Camaros, and Mustangs rank among the most expensive to insure. From an underwriter’s perspective, there’s more risk involved.

But it’s not just about the car you drive.

Other factors, such as safety record, play a large role as well. If you haven’t already purchased your high performance car, it may be a good idea to research insurance rates before buying. The differences can be quite significant between models and companies for reasons that may not be readily obvious.

Coverage for Your High Performance Car

Theoretically high performance car insurance can be purchased legally at state minimum liability limits. However for a variety of reasons that’s probably not a good idea.

For one, minimum liability limits are often insufficient for even lower-cost models. Repairs and other associated costs for larger-than-fender-bender accidents can easily exceed minimum limits if you’re at fault. When dealing with high performance vehicles, the problem will probably be larger because it’s a more conspicuous car.

In addition, high performance cars represent an investment. As such, good material coverage is often recommended even after the bank is paid off. You wouldn’t want to treat your sports car in the same way as you would an old beater. After all, it may become a bona fide classic in a few years.

Exotic Coverage for Your High Performance Car

A standard full coverage policy may be sufficient for a domestic high performance vehicle. But it doesn’t work that way for all sports cars.

If you own a six-figure vehicle like a Ferrari, Lamborghini, or Masarati, you should consider exotic car insurance. Standard companies that would insure other high performance models may need to refer you to a special insurance broker.

As a general rule, when the car becomes more like an investment than a means of transportation, special insurance considerations should be addressed.