Car Insurance for Out-of-State Students

What changes when you insure a car in a different state

Your car insurance follows your car, not your home state. If you own a vehicle and live in a dorm or off-campus housing in a state different from where your parents live, you need a policy issued in the state where the car is registered and primarily garaged — that is, where you actually park it most of the time. Many students and parents miss this step and discover too late that their out-of-state policy won't cover a claim.

The state where you register your car sets the minimum coverage you must carry. Some states require higher liability limits than others, and some have different rules about uninsured motorist coverage or personal injury protection. Your insurer must write a policy that meets your registration state's requirements, not your parents' home state's requirements.

If you move back home for the summer or after graduation, you will need to update your policy again. Insurers track where a car is garaged, and moving it to a different state without notifying them can void your coverage or trigger a policy cancellation.

Key Takeaways

• You must insure your car in the state where it is registered and where you primarily live, not in your parents' home state.
• Each state sets its own minimum insurance requirements, so your policy must meet the rules of the state where your car is registered.
• Tell your insurer your college address and confirm they will write a policy for an out-of-state student before you buy.
• When you move — whether back home for summer or after graduation — update your address with your insurer within a few days to keep your coverage valid.
• Some insurers offer discounts for good grades, defensive driving courses, or bundling with your parents' policy, even if the policies are in different states.

Registering your car in your college state

Before you can insure a car in your college state, you need to register it there. Registration is handled by your state's Department of Motor Vehicles (or equivalent — some states call it the Secretary of State). You will need your title, proof of ownership, a completed registration form, and proof of residency. Proof of residency can be a lease, a dorm housing agreement, a utility bill in your name, or a bank statement showing your college address.

Registration costs vary widely by state and by the age and value of your vehicle. Some states charge a flat fee; others charge based on the car's weight or value. You can usually register online, by mail, or in person at a local DMV office. Most registrations are valid for one or two years, and you will need to renew before the expiration date or face fines.

Once you have a registration in your college state, you can shop for insurance. Do not insure the car before you register it — insurers will ask for your registration number and will verify it matches the vehicle you are insuring.

Finding an insurer that covers out-of-state students

Not all insurance companies write policies for students living away from home, and some charge more for out-of-state coverage. Before you spend time getting quotes, call or visit the insurer's website and confirm they will insure a car registered in your college state. Many large national insurers — State Farm, Geico, Progressive, Allstate, USAA — do cover out-of-state students, but smaller regional insurers may not.

When you get a quote, be clear about your situation: you are a student, the car is registered in your college state, and you live there during the school year. Some insurers will ask whether your parents own the car or you do. If your parents own it and you are the primary driver, that is a different setup than if you own it outright, and it may affect your rate and coverage options.

Ask about discounts. Many insurers offer discounts for students with a GPA of 3.0 or higher, for completing a defensive driving course, or for bundling your policy with your parents' homeowners or auto policy — even if your policies are in different states. Some also discount for low mileage or for taking a driver safety class. These discounts can add up to 10 to 25 percent off your premium.

Whose name goes on the policy

You have two main options: you can be the policyholder, or your parents can be the policyholder with you listed as a driver. Each has trade-offs.

If you are the policyholder, you own the policy and make decisions about coverage and claims. You pay the premium directly, and the insurer sends bills and notices to you. This is simpler if you are financially independent, but it means you are responsible for keeping the policy active and for any lapses in coverage. If you miss a payment, the policy cancels and you will be uninsured.

If your parents are the policyholder, they pay the premium and manage the policy. You are listed as a driver on their policy. This can be cheaper — many insurers give discounts for bundling multiple vehicles or drivers on one policy — and your parents can help you remember to renew. The downside is that your parents control the coverage choices and will see claims and accidents on their policy. Some parents also worry about liability if their child causes an accident while driving an out-of-state car.

Talk with your parents about which setup makes sense for your situation. If they are paying for the car and insurance, they will probably want to be the policyholder. If you are paying, you should be.

Minimum coverage and what it costs

Every state requires a minimum amount of liability coverage — the insurance that pays for damage or injury you cause to someone else. The minimums vary. Some states require $25,000 per person and $50,000 per accident; others require $50,000 per person and $100,000 per accident. A few states have lower minimums. Look up your college state's minimum on the state insurance commissioner's website or ask your insurer what the state requires.

Liability coverage is usually the cheapest part of your policy. Collision and comprehensive coverage — which pay for damage to your own car — are optional in most states but required if you have a loan or lease. Collision covers accidents; comprehensive covers theft, weather, and vandalism.

A typical policy for a student with a used car might cost $100 to $200 per month, depending on the car's age and value, your driving record, the state, and the coverage limits you choose. Rates are higher in urban areas and lower in rural areas. If you have had accidents or traffic violations, your rate will be higher. If you have a clean record, you may may have access to for a low-mileage discount if you drive fewer than 7,500 miles per year.

Keeping your coverage active when you move

If you move back to your parents' home state for the summer, or if you graduate and move to a new state, you must tell your insurer within a few days. Do not wait until the end of the month or until you renew. An insurer can deny a claim if you were living in a different state than the one listed on your policy.

When you move, you have two choices. If you are taking the car with you, update your address with your insurer and ask them to rewrite your policy for your new state. This may change your rate and coverage options, since each state has different requirements. If you are leaving the car behind — for example, selling it or leaving it with a family member — tell your insurer you are no longer the primary driver and ask what happens to the policy.

If you are moving back to your parents' state and the car will be garaged there, your parents' insurer may be able to add you and the car to their existing policy, which can be cheaper than keeping a separate policy. Ask your parents' insurer whether they can do this and what it will cost.

What to do if you have an accident or get a ticket

If you are in an accident, call the police if anyone is injured or if there is significant damage. Get the other driver's name, phone number, address, driver's license number, license plate, and insurance information. Take photos of the damage to both cars and of the accident scene. Do not admit fault or apologize for the accident — let the insurance company investigate.

Call your insurer within 24 hours and report the accident. Have your policy number and the other driver's information ready. Your insurer will assign a claims adjuster who will contact you to schedule an inspection of your car. Do not repair the car until the adjuster has seen it, unless you need emergency repairs to make it safe to drive.

If you get a traffic ticket, pay it or contest it in court — do not ignore it. A conviction for a moving violation will increase your insurance rate and may cause your insurer to cancel your policy. If you get multiple tickets or are at fault for multiple accidents, your insurer may decide not to renew your policy when it expires.

Frequently Asked Questions

Can I stay on my parents' insurance policy in their home state?

No. If your car is registered in your college state, your insurer must write a policy that meets that state's requirements. Your parents' home state policy will not cover a car registered elsewhere. You need a separate policy in your college state, though your parents can be the policyholder if they prefer.

What if I only keep the car at school for part of the year?

You still need to register and insure it in your college state if that is where it is garaged most of the time. When you move it to your parents' home state for the summer, update your insurer's records. Some insurers offer a "seasonal" or "away at school" discount if the car sits unused for several months, so ask about that option.

Do I need uninsured motorist coverage?

It depends on your state. Some states require it; others make it optional. Uninsured motorist coverage pays for your injuries if you are hit by a driver with no insurance. It is usually inexpensive and protects you if the other driver cannot pay for your medical bills. Ask your insurer whether your state requires it and what it costs to add.

What happens to my rate if I have an accident?

Your rate will likely increase after an at-fault accident. The increase varies by insurer and by state, but you can expect your premium to go up by 20 to 40 percent for three to five years. If the accident was not your fault, your rate should not increase. Some insurers offer accident forgiveness, which means your first accident does not raise your rate — ask whether this is available.

Can I get a discount for good grades?

Yes. Most major insurers offer a good student discount — usually 10 to 15 percent off — if you maintain a GPA of 3.0 or higher. You will need to provide a copy of your transcript or report card. The discount applies whether you are the policyholder or listed as a driver on your parents' policy.