Is it legal for an insurance company to deny automobile insurance to an out-of-state college student on their own policy?

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Is it legal for an insurance company to deny automobile insurance to an out-of-state college student on their own policy?

The insurer states it is company policy to deny insurance if I will be out of the state over 50% of the time, even though I am a resident with a permanent address in the state. I have never encountered a policy so bizzare. If I were on a parent’s insurance policy, I would be given a policy.

Asked on April 18, 2013 under Insurance Law, New Jersey

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The reason it is denying you is because you will be out of state, and the accident rates may be higher, there may be higher costs to litigation if an accident were to occur out of state and you are young (under 26). You need to consider whether you can be on your parents' insurance and whether other more college-student friendly insurance carriers will allow you to have a policy with them. This is a contractual issue and it is the option of the insurance company to deny you coverage.


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