Insurance & Students: Everything You Need to Know
Being a student is hard work — so is raising one.
The university or college years are memorable chapters of the lives of young adults. They’re a time to make friends, explore ideas, learn lessons (academic and otherwise), and for many, a time to spread your wings and live away from home for the first time.
For parents, they’re a milestone for different reasons. Watching your kid head off to post-secondary is surely a great source of pride, a chance to reflect on how far you’ve come as a family, and undoubtedly, a major financial consideration.
While we can’t help students with their assignments, or help parents cope with an empty nest, we can help them both with one thing — insurance. The school years are a pivotal transition for so many families, there’s a lot to consider when it comes to protecting what’s important. Join us as we explore everything you need to know about insurance for students.
CAR INSURANCE FOR STUDENTS
For many Canadians, learning to drive is a right of passage. No more relying on mom or dad for a ride — it’s a time to learn the rules of the road, get your beginners license, and be on your way to 4-wheeled independence.
In the eyes of most insurance companies, all drivers under the age of 25 are ‘student drivers’. Because student drivers are relatively inexperienced on the road — with shorter track records of safe driving — they’re considered higher risk and therefore pay higher car insurance premiums.
Some policies permit parents to list their teenage children as a driver within their existing plans, which saves parents the hassle of searching for new insurance for their kids.
On the other hand, some insurance policies require purchasing additional insurance for the new driver, and that can raise your insurance expenditure significantly.
What types of car insurance coverages are available to students?
Students have access to the same types of coverage that experienced drivers do. Here’s an overview of what’s available to student drivers in Canada:
- Third-Party Liability: This mandatory coverage is the most important for drivers to have because it protects you if you’re at fault for an accident. With third-party liability, if you caused an accident and the other driver makes a claim against you, you’ll be covered against their medical costs, their loss of wages, and the cost to repair or replace their vehicle.
- Collision: This non-mandatory coverage covers the cost to repair your vehicle following an accident with another vehicle, a collision with an object, or a hit-and-run that has been reported to police.
- Comprehensive: This non-mandatory coverage covers the cost to repair your vehicle following non-collision related incidents, including theft, natural disasters, fire, explosions, vandalism, civil unrest, falling objects, strong winds, or shattered windows.
- Accident benefits: This non-mandatory coverage covers the medical and rehabilitation costs that you may incur following an accident. A loss of income benefit may also be available if you’re unable to work because of the accident.
- Uninsured motorist: This non-mandatory coverage covers you if you are injured or killed by an unidentified or uninsured motorist.
What types of car insurance discounts are available to students?
Premiums are often higher for student drivers (age 25 and under), so it’s important to take advantage of any available discounts. Here are a few ways to save:
- Take a driver’s education course. Successfully completing a recognized driver’s education course signifies to your insurer that you know the rules of the road and take safe driving seriously. Most insurance companies will give you a 5% – 15% discount upon completion.
- Get fully licensed. A full, unrestricted licence is favoured by insurance companies. In Ontario, an accident-free driver with a G license is likely to save 10% over an accident-free driver holding a G2 beginner’s license.
- Prove you’re enrolled. Some insurance companies will offer student drivers a discount by simply showing proof they’re enrolled in a secondary or post-secondary educational institution.
- Prove you’re a good student. Some insurance companies will offer a 10% ‘good student discount’ for full-time students who provide official transcripts and maintain good grades (usually an 80% average or higher).
- Report if you’re away at school. Some insurance companies will offer up to a 50% discount for full-time students who are studying at least 100 km away from their parents’ home, and who do not take the car to school with them.
- Bundle your policies. Students with car insurance and renters insurance may qualify for a discount if they bundle their policies together with the same insurer.
- Ask your broker. Students who live at home may be covered under their parents’ car insurance policy, so ask your broker if this is the case before purchasing a separate policy.
What is a “good” student?
Here are the most common prerequisites for a ‘Good Student Discount’ in Canada:
- The student applying for student auto insurance must be younger than 25 years.
- The applicant must have full-time enrollment in a high school, college or university.
- The student must have maintained an:
- 80% average or its equivalent.
- B-grade average.
- 0 Cumulative Grade Point Average.
- Be on their institution’s ‘Honor Roll’ or ‘Dean’s List.’
- If home schooled, the student must provide an alternative proof of good educational performance.
These requirements are necessary to access the discount. If you are currently unable to meet these requirements, you can make an effort to reach the required standard and then apply.
It is important to note that these are just the basic prerequisites which most Canadian insurance providers ask you to meet. There might be some providers who have additional requirements that you need to fulfill before they offer the ‘Good Student Discount’ to you.
Away at School Discount
Most students apply to colleges and universities out of province, away from their area of residence. While choosing your college experience, which includes living in a dorm, learning how to live independently and keeping up your grades, the last thing you want is expensive insurance, which is why insurance companies provide ‘Away at School’ discounts. This discount gives college students access to cheap car insurance.
Underage operators (under the age of 25), can qualify for an ‘Away at School’ discount if they get accepted for post-secondary education which requires them to live away from home.
In order to obtain this discount, the students must:
- Qualify as occasional drivers on a registered vehicle under the auto insurance company.
- Be registered full-time as a student in a recognized post-secondary institution – whether College or University.
- Study at an institution that must be at least 100 km away from their house.
- Reside near the institution, only to return home on holidays bar any unforeseeable circumstance.
Authorized proof of admission into said institution is necessary before you can avail discounted student auto insurance.
Some insurance providers also require students to maintain a clean driving record prior to applying for the ‘Away at School’ discount to ascertain their driving skills.
‘Away at School’ discounts may measure to as high as 50 percent, providing students with substantial relief and an opportunity to save money.
RENTERS INSURANCE FOR STUDENTS
Renters insurance — also known as ‘tenants insurance’ — is important for students. But because most students don’t own homes, they often overlook the valuables they do own, namely the usual array of electronic devices: laptops, smartphones, televisions, sound systems, and e-readers. The value of these items adds up quickly, and the cost to replace them isn’t usually in a student budget. Luckily, renters insurance covers the cost to replace stolen valuables. Here’s a list of things to consider and reasons why renters insurance should be on every student’s back-to-school list:
- Do your homework. Students might already be covered under their parents’ homeowner policy, but be sure to call your provider and get the details. Based on what’s covered — and how much a student claim could impact the parent’s policy — it might make more sense to purchase a separate renters policy for the student.
- Stay covered. Stolen or damaged student property is covered. Just be sure to photograph and document all valuable belongings when you open the policy.
- Protect the house. If part of the rental property is damaged, the student tenant could be deemed negligent, and thus liable. In a case like this, renters insurance will safeguard against to costs to fix the property.
- Protect yourself. If someone gets injured while on the student’s rental property, any legal costs or settlements that result would be covered.
- Temporary housing. If a student is forced to live in temporary housing while their rental property is being repaired, the lodging costs will be covered.
HEALTH INSURANCE FOR STUDENTS
Getting sick while at school isn’t something anyone expects, but it’s better to be safe than sorry. Here are the three main health insurance scenarios students should consider:
Canadian students studying in Canada. Even if they’re studying outside of their home province, Canadian students will have access to a basic health coverage through the provincial government, as well as an extended plan offered by their school (which usually covers additional services such as dental, prescription, counselling, etc). But always remember to look carefully at your plans, as they may not be enough to cover the cost of care while away. You may require additional private coverage.
On the other hand, if you find that you’re sufficiently covered through your parents’ health plan, you may decide to ‘opt out’ of your student health plan, which usually results in getting a small amount of money back for declining the unneeded coverage.
Canadian students studying abroad. As a visiting student, you may have access to a student health plan in your host country, but always look carefully at what is covered. Often times, you’ll need to purchase additional coverage before leaving Canada to ensure you’re properly covered and to avoid incurring any major costs, such as hospitalization.
International students studying in Canada. International students coming to Canada with valid student visas are required to have health insurance. However, health plans vary by province, and not every province covers international students (e.g. OHIP does not cover international students) or services such as hospitalization, prescriptions, dental, or vision. Therefore, it is incumbent upon international students to research what is available in their host province, to enquire about what is offered through their school, and to purchase additional (private) coverage if need be.
To learn more about Student car insurances and discounts, contact the experts at Duliban Insurance Brokers at 1-855-385-4226. Our licensed insurance experts will be happy to answer any questions you have!