To Exclude Or Not Exclude, That Is The Question

With college kids revving up for another year away at college, parents often call to remove their children from their auto policy to try to save a few dollars. While this may be possible in some states, it is not the case for all. In Massachusetts all household members or customary operators of a vehicle must be listed on the auto policy. If a person’s legal address is your home, then they are considered a household member. So what happens when your child goes away to school? If they live in a dorm room on campus and come home for winter and summer breaks, then they are still technically a household member. This means that in some states they are not able to be removed from the policy.

Don’t worry if your state does not allow a household member to be deleted from your auto policy, there are other ways to decrease your premium for the months while your child is away. One method of decreasing your premium is to “exclude” the operator from the vehicles on the policy. This form tells the insurance company that the “excluded operator” will not be driving any of the vehicles under any circumstances. Both the driver and the policy owner sign the form acknowledging that this is the case. Once excluded, the insurance company will remove the additional premium being charged for that driver. The reason the company will allow this is because there is no coverage for the excluded driver if they get behind the wheel of a car on that policy and get into an accident. When you and your child sign that exclusion form, you are signing away their coverage. This should be used for those college students who only come home for Thanksgiving, summer and winter breaks, and spring break (of course there will always be some weekend trips back home to do laundry and get a good home cooked meal).  You would contact your insurance company or agent to advise them that your child will be home and driving the car so that they can be unexcluded for that period of time. You must sign another exclusion form to re-exclude them before they go back to school.

If your child brings a car to school with them, or comes home frequently on weekends and uses your vehicles, then this is not the choice for you. Fear not, there are still ways that you can save some money. In Massachusetts there are “good student” discounts for those who have a certain GPA, typically 3.0 or better. If you provide your company with proof, such as a copy of your child’s transcript, then a discount can be applied to the vehicle they are being rated on. It is a good incentive for students to get good grades as it helps to ease the financial burden inexperienced operators cause on auto insurance policies. This discount is available in Massachusetts for any high schooler or undergrad who goes to school full-time. Grad students are typically not eligible for this discount as they more than likely have had their license for over six years and are no longer considered inexperienced operators.

There are also credits available for those who cannot exclude their children that are away at school but do not take a vehicle with them. Excluding an operator may not be an option for you if you have a personal umbrella policy, for instance. If your child attends school more than 100 miles away from home, then you could be eligible for the “student away at school” discount. This discount is for those students who are listed on an auto policy but have no access to a vehicle on the policy due to the fact that they are so far away from home.

Take a few minutes to call your insurance company or agent to discuss your options. If your son or daughter is a student who is going away to college, it might save a few dollars.