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Are You Covered When Driving this Summer?

June 20, 2012

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School’s out and for those students who don’t have a car it means the freedom of finally having our own transportation back. No more relying on public transportation or bumming rides from friends. But something that many people don’t think about before they jump in their cars and hits the road is whether they have insurance through their parents.

If a student has their own car, meaning that the title is under their own name, then they have to have their own insurance, independent of their parents. This is a good thing for parents because their rates are likely to go down but the rates for the student are likely to be higher because they are considered “higher-risk” due to their age and lack of experience. Therefore, if you plan to only carry insurance during the months that you are driving the car, it is important to make sure to reinstate your policy before you ever get behind the wheel. It’s better to pay the money than to get stopped without insurance, or, even worse, to get into an accident and not be covered.

However, if the student is still under their parents insurance, then you have to look into the plan to make sure they are covered. The student is probably listed as an additional driver so you could remove them when they are not using the car and add them back when they come home. Again, make sure to remember to add them back before they ever drive. However, another option is to tell the insurance company that they will only be driving the car at certain times of the year so that they are a part-time driver. The most important thing is just to check with your insurance company to see if you need to notify them when they intend to drive the car or if there are any additional steps you must take to make sure they are covered.

For others, a car this summer might not be in the cards. One alternative that many turn to, instead of public transportation, is car sharing through companies such as Zipcar. Car sharing is very similar to renting a car, except for the fact that you can rent them for only a few hours and they provide you with gas and insurance. However, many do not look deeper into what that insurance covers.

For example, while Zipcar insures up to $300,000 of coverage for drivers over 21 and the state minimum for anyone under the age of 21, the member can also be responsible for a damage fee up to $750 if they are involved in an accident while driving the car. Also, if the total amount exceeds their coverage limit it is up to the driver to cover the rest of the damages. Therefore, if you get into an accident that injures multiple people there is definitely a chance that the damages will exceed $300,000 and the remaining bill will be on you. Also, Zipcar only offers the state-mandated minimum coverage for your own bodily injuries so you will have to rely on your own health insurance should it exceed what Zipcar covers.

Other car share companies, such as Connect by Hertz, offer even less coverage. Therefore, the best option when planning to use these companies is to make sure that you have other auto insurance, either through your parents or on your own. While the cost may seem great now, it will be worth it should anything ever happen and you will be happy that you were covered.

Sources:

http://www.insure.com/car-insurance/college-student-insurance.html

https://support.zipcar.com/hc/en-us

http://www.nytimes.com/2011/04/23/your-money/23money.html

Photo credit: Mandroid

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