Ask Your Absolute Insurance Agent: When should my kids get their own auto insurance policy?

Q: ”When should my kids get their own auto insurance policy?”

A:  This is a question that we get often with our clients.  When children obtain their driver's license we list them as insured drivers on their parent's auto policy.  Every policy requires all licensed members of the household to be listed as an operator on the auto insurance policy.  We recommend letting us know when your children get their driver’s permit and when they get a school license, intermediate, or regular driver's license.  As kids grow up, when do they need to get their own auto insurance policy?

If your child has moved out of your house and is no longer a dependent, they need to have their own insurance policy.   Under most personal auto insurance policies, the “insured” covered by the policy includes “family members”.  Family members are limited to “a person related to you by blood, marriage or adoption who is a resident of your household.”  Once an adult child moves out of the household, they would no longer meet the definition of the “family member/resident relative” on your insurance policy.  We know your adult children will always be your family member, but unfortunately, they won’t be defined as an insured on your auto policy once they are no longer a resident in the household.  Why is this important?  Here are some examples to show why:

• Your daughter Amy is excited to go to her former ISU college roommate’s destination wedding in Colorado.  She rents a car and doesn’t buy the insurance offered by the rental car company.  If she were to be in an accident, the liability and physical damage from your insurance policy will not extend to the rental car.

• Your son Brent borrows his friend’s truck to move from an apartment in Waukee and to a new apartment in Ankeny and rear-ends another vehicle, injuring the other vehicle’s driver.  Since Brent is no longer a resident of your home, he has no liability coverage for the other driver’s bodily injury or the property damage to the other vehicle.  

• Your child is crossing the street in Des Moines and hit by a hit-and-run driver.  There would be no medical payments or uninsured motorist’s coverage for his or her own injuries.  Same if they are riding a bicycle and struck by a vehicle that was uninsured, underinsured, or left the scene.

Without coverage from an auto insurance policy, your child will have to pay these expenses themselves. Some of our largest claims come from the uninsured or underinsured motorists coverage.  This is why we are discussing this.

Another factor of whether to keep your child on your insurance is how the vehicle is titled.  With some companies, all vehicles on an insurance policy have to be titled to the named insured.  If your son or daughter has their own car titled in their name (even if they still reside in your home), they might need to have their own insurance policy.  Some of our companies do allow vehicles to be titled in different names - this is something that you should talk to your agent about.  

Each insurance company has its own guidelines, so it is best to talk to your Absolute insurance agent about your specific details.

You've Got Q's; We Got the A's

Q:  The color of my car affects my insurance rates, right?

A:  False.  The color of your car does not impact your car insurance rates.  What does influence your rate is your vehicle's year, make, model, body type, engine size, safety-features, and anti-theft features, along with your credit history, driving record, and geographic location.


Q:  No Fault Insurance means it's not my fault, correct?

A:  No.  It means that your company will pay for the damage to your vehicle (if physical damage is purchased) regardless of whose fault it is.  This type of policy is not available in Iowa and is a state specific type of coverage.  I, for one, am thankful that Iowa has not adopted this type of policy!


Q:  If I recently paid my insurance bill, the new car I just bought is covered?

A:  Yes, to a point.  Most insurance companies require that you notify the company of the agent within a specified number of days after the purchase.  There is a short grace period where the coverage does automatically transfer from one full coverage vehicle to a new full coverage vehicle.


Q:  If I lend my car to a friend and they get into an accident, will their company cover the damages?

A:  False.  Your car, your responsibility!  However, your friend's insurance could act as excess insurance if the damages exceed your policy limits.


Q:  I don't want uninsured/underinsured motorist because I don't want to pay for those drivers' cars!

A:  This is a common misconception.  That coverage is purely for your protection.  It pays for your lost wages and medical bills if you are struck by a driver without or not enough coverage (relative to the accident).  It does not pay for ANY vehicles, yours or theirs.

Spring Time Fun: Insurance for Toys

Insurance is not like the old one size fits all ball cap.  Rather, people with specialized needs will want to get a policy that provides coverage for those needs in specific.  Often times, especially with boat insurance, it is often overlooked or attached to a homeowners policy to cover liability, however, often times this is truly basic coverage that may not suit your situation.

Most often, it is better to separately insured your toys with specialized policies that can provide coverage for Custom Parts and Equipment or to add coverage to possible belongings, such as fishing equipment on a boat owners policy.

Much like an auto insurance policy, special coverage can be purchased for towing, roadside assistance, and rental reimbursement on many specialty lines products including motorcycle, RV, ATV, boat, and personal watercraft.

Another important, and often times, neglected coverage comes by way of the RV, with an optional replacement cost endorsement (if new) and vacation liability coverage.  These can be added to your specialty lines insurance coverage at reasonable cost and leave you worry-free.

We understand that these aren't just toys, they are a way of like.  Your life.  We pride ourselves in partnering with companies that hold this same view and offer competitive rates for specialty claims centers with representatives trained specifically to handle your custom needs.

Call your Absolute Agent for further details on coverage and rates.

Earthquake Coverage

While we don't live in California, with a constant barrage of information, warnings, and occurences, it is not unknown to the Midwest to have devastating earthquakes occur.

The fault line that we are most concerned with in this region of the US is the New Madrid fault line.  This fault line and Seismic Zone runs between St. Louis and Memphis.

According to some "Danger Zone" maps, most of Iowa would feel the seismic activity while indoors, while Southeastern Iowa could actually have unstable objects overturned.

While it may not lead to the same type of damage seen in California, a substantial amount of property damage could very well be evident in or around Iowa.  Unfortunately, earthquake coverage is not an automatic coverage on your homeowners policy.  It is an endorsement that can be added to your policy and normally functions with a percentage deductible.  By this, a person can have earthquake coverage at a 5% deductible, where the percent derived from your total dwelling coverage.  For example, if your home is insured to $100,000, your 5% deductible would be $5,000.

The cost of this endorsement ranges from company to company along with deductible options but is typically between $40 - $80 per year for this additional coverage being added to your existing homeowners policy.  Call your Absolute Agent for further coverage details.