Determining Who Is at Fault in an Auto Accident

Determining who is legally responsible in an auto accident requires identifying who the negligent party is.

In most cases, common sense can be used to determine fault, but often drivers do not know exactly which laws were broken by the at-fault party. This makes it more difficult to prove a case to an insurer when making a claim.

There are a few places to look for this supportive information.

 

Police reports

If you or the other party called the police or 911 after the accident to report injuries, there will be a police report.

If that’s the case, you can contact your local law enforcement traffic division to ask for a copy of the report.

Many police reports contain a responding officer’s opinion about who was at fault. If one party clearly violated any laws, the officer will write that in the report.

Typically, any mention of the other party breaking traffic laws will be enough to sway your insurer that you were not at fault.

 

State laws

As backup, you can search your state traffic laws to find out if the other party violated the law.

You can often find information on the DMV website, or you can get a copy of the driver handbook that will typically outline most instances of traffic violations. The handbooks include language that is written in laymen’s terms so they are easy to understand.

Law school libraries and local public libraries may have more detailed versions of these codes.

 

No-doubt liability

In some accidents, the other driver is almost always considered at fault.

For example, if another motorist hits the back of your car, the insurance company will typically consider them at fault because it is most likely they were either following too closely or failed to react in time when you put on your brakes.

One of the basic rules of the road in every state is that a driver should follow a vehicle ahead at a safe enough distance to be able to stop even if the other person brakes suddenly.

Also, damage is easy to prove with a rear-end accident. One driver’s vehicle will be damaged on the front end, and the other driver’s vehicle will have damage to the rear.

That said, for drivers who are rear-ended, there are still a few situations where their carelessness is a contributing factor to the accident.

If the insurance company investigates the claim and finds that your brake lights were out, this could reduce the amount of compensation you receive and you could be considered at fault.

Your compensation may also be reduced if you ignored mechanical issues that should have been fixed and were a contributing factor to the accident.

Another example of an accident where there is a clear violator is a left-turn accident.

Anyone who makes a left turn and is struck by a vehicle on the other side of the road that is going straight in the opposite direction is an at-fault driver unless:

 

•          They were making the left turn at a green turn light.

•          They were at a four-way stop and had the right of way.

•          The oncoming vehicle was greatly exceeding the speed limit, which made it difficult for you to judge how fast they were coming towards you.

 

Also, the turning driver will have damage on the side of the vehicle, and the oncoming vehicle will have damage to the front end or the side if the turning driver tried to swerve.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Hiring a Contractor? Make Sure They’re Insured

When you hire contractors, electricians or other home repair specialists, you may shop around on price and go with the least expensive one.

But if a contractor comes in with a bid that is much lower than the competition, it could mean they are cutting corners – and one of the top ways for them to do this is in the insurance they carry, or are supposed to carry.

Consider these scenarios:

  • An electrician’s faulty work starts a fire that guts your kitchen and dining room.
  • A contractor’s worker breaks a leg while working on your home.

If either of these events occurs and the contractor doesn’t have insurance, you’ll be on the hook for the damages.

Even if a contractor tells you they are insured and bonded, you need to verify that it’s true. After all, they could be stretching the truth by just having their vehicle insured, and they could be bonded for another project they have worked on in the past.

While your homeowner’s policy provides some liability coverage, it may not cover all the costs in an especially costly event.

The first thing you should do when hiring a contractor is to ask to see their certificate of insurance. If they don’t have it, they can call their insurance agent and ask them to send it to you. A certificate doesn’t provide all the insurance details, but it’s a good start.

However, if you are having major work done on your home, you need to delve further. You should look for the following:

 

Coverages on certificate of liability insurance

Current dates – Check to see that the coverage is current. If it’s past the policy expiration date, then it doesn’t tell you if they currently have insurance.

General liability coverage – The contractor should have this insurance, which covers bodily injury to you or third parties and property damage arising out of their operations. Check also to see if their coverage includes “products and completed operations,” which covers damages that may arise out of their finished work. If this is not included, then the contractor’s liability ends when they finish the job.

Workers’ compensation – This coverage is mandatory for all employers, except under very rare circumstances. It covers medical expenses and lost wages if an employee is injured on the job. If the contractor doesn’t have this coverage, you could be on the hook for these costs.

Sometimes small contractors will tell you that they don’t need to have it, but that is typically true only if they have no employees and it’s a sole proprietorship.

 

Other coverages to look for

Builder’s risk – If you are building a new home or adding onto your home, this provides protection for the new construction and building materials while it is being built.

While most contractors will buy this coverage, some of them will ask the homeowner to do so. Make sure you are clear who should buy this coverage and, if it is the contractor, make sure you ask for proof that it’s been purchased.

Fidelity bonds – The most common type of bond you could encounter provides protection if a contractor’s workers steal from you. While better than nothing, actually getting paid from these bonds can be somewhat difficult.

It’s probably a better bet to lock up or remove your valuables when contractors are working in your home. Although you have hopefully picked a contractor you trust, he or she is probably not going to be the only one that enters the job site.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Five Ways to Reduce Accidents among Your Driving Employees

We’ve often discussed the scourge of distracted driving in America, brought on in large part due to the use of smartphones and leading to a significant spike in vehicle accidents, injuries and deaths. That in turn has led to a jump in both commercial and personal auto insurance pricing.

The risk for businesses is even greater as a careless driving employee can result in a substantial liability claim, particularly if a third party is injured. If one of your drivers is found to have been engaged in distracted driving, any judgment or settlement for a personal injury could easily cost more than $1 million.

While you can hold meetings about the dangers of distracted driving and what your driving employees can do to reduce the chances of crashing, in the end it comes down to trusting that they will do the right thing.

So what can you do? We suggest a holistic approach to the issue.

 

  1. Understand distracted driving

Just how bad is the distracted driving problem? In 2015 alone, 3,477 people were killed and 391,000 were injured in motor vehicle crashes involving distracted drivers. During daylight hours, an estimated 660,000 drivers are using cell phones while driving. That creates enormous potential for deaths and injuries on U.S. roads.

But smartphones are not the only source of distraction. Road safety experts say there are three types of distraction for drivers:

  • Manual – This can include looking around for a lost object in the car, reaching under the seat or behind to the back seat.
  • Cognitive – This can include a driver who is lost in thought and not paying full attention to driving.
  • Visual – Anything that makes a driver takes their eyes off the road, like looking at the GPS or searching for a song on an iPod.

 

Some distractions actually are a combination of two or all the above, like texting or posting stuff on Facebook.

All of your training for your driving employees must emphasize the need to address all types of distracted driving, and should include scenarios to help them make proper decisions when behind the wheel.

  1. Hire good drivers

When hiring personnel who drive, consider what their primary responsibility is. For example, if you own a plumbing operation, your drivers are not necessarily going to be professional drivers, since their primary duty is fixing plumbing issues.

But if you are hiring any workers who will be driving as part of their job, even if it’s not their primary responsibility, you should still make sure they are good drivers by checking their driving records.

Hiring safe drivers is one of the best ways for you to ensure you are putting safe drivers behind the wheel. After all, past driving behavior is the best indication of future performance.

If you think any prospect will be driving as part of their job, you should pull their DMV records. Look for anything serious like DUIs or frequent citations for moving violations. You should decide what your level of tolerance is for driving histories.

In addition, check their resumes to see whether they were driving as part of any of their prior jobs, and if they have experience driving the same type of vehicle they would be driving for you.

Also ask about any medications the applicant may be taking, as some can affect their driving.

Finally, consider requiring candidates that would be driving to take a road test as part of the recruitment process.

  1. Coach current employees to be safe drivers

You should hold regular training for all of your current employees that may drive as part of their job, even if they are only running to the office supply store or on an occasional errand.

You should attack this in a three-pronged approach:

  • Pull their DMV driving records annually.
  • Subject them to road tests where they are graded on their safe driving.
  • Hold an annual meeting to go over safe driving policies; reinforce the dangers of distracted driving and stress the need to always focus on the task at hand.

 

You should also have safe driving policies in writing that are enforceable. Your policies should list all the behaviors your workers are prohibited from engaging in while driving.

Some rules you can include:

  • Never answer the phone while driving, even if you have a hands-free device.
  • Bar programming a GPS while on the move and require that they pull over when safe to do so.
  • Never hold your smartphone in your hand while driving.

 

Your policy should also specify the consequences and any disciplinary action for breaking the rules.

You should maintain records of these policies. This is of utmost importance if one of your employees is in an accident and accused of negligence. Your policy and proof of training can protect your organization.

 

  1. Take advantage of technology

Many companies are installing GPS tracking devices in their vehicles so they can receive real-time information about a vehicle’s location and rate of speed. This gives you valuable insight into any dangerous habits your drivers may be engaging in.

You can also install technologies that will block cell phone signals while the vehicle is moving.

 

  1. Have procedures for dealing with accidents

Despite your best efforts, your driving employees may still have accidents. They should be trained in the procedures they should follow after an accident.

Some companies include accident kits in their vehicles. They are typically a small bag or box that’s kept in the glove compartment.

The kit should explain what they should do, including:

  • Taking photos from all angles after an accident.
  • Completing a form on which to record details of the accident, including where it took place, how it occurred, the damage to third parties, the other driver’s insurance information, road conditions, and more. Require your drivers to take down all the details at the scene of the accident.
  • Calling the police in the event of an accident.

Employees should not discuss who was at fault with the police, but they can work with them to document the accident. Plus, a police officer can provide a calm, outside perspective on a stressful situation.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

As Risks Rise, You Need a Commercial Umbrella

As a responsible business owner you no doubt make sure that you are properly insured for any liabilities resulting from damage to other parties.

Imagine some of the following scenarios:

  • What if a visitor trips and falls at your business, breaking a leg and are unable to work for a few months while they recover?
  • What if a customer suspected of stealing later proves his innocence and sues for defamation of character?
  • What if one of your employees, driving a company truck, rams into a passenger car severely injuring some of the occupants?

 

The costs of a large financial settlement could surpass the primary liability limits of your existing insurance policies, leaving your business responsible for the rest of those costs. And a high-cost accident or lawsuit could potentially put your company out of business.

To avoid any of these scenarios, it’s wise to carry a commercial umbrella policy, which will essentially pick up where your primary insurance leaves off – or runs out.

All of your policies have limits. Once those limits have been breached, the other party can sue and go after your firm’s assets. Breaching those limits is getting easier due to the increasing prices of vehicles as well as health care costs, should the other party suffer physical injuries.

An umbrella policy will also cover you for liability for which there is no primary insurance, or when a primary policy includes an exclusion that the umbrella policy doesn’t.

 

Unfurling the umbrella

An umbrella policy will kick after limits are breached for:

  • Commercial general liability (bodily injury, property damage, personal injury, defense costs and attorney’s fees, limited contractual liability).
  • Business owners liability
  • Business auto liability
  • Employer’s liability

 

Most umbrella insurers require you to purchase primary insurance coverage before selling you an umbrella policy – for example, general liability insurance, auto liability insurance, workers compensation or employers liability insurance.

Umbrella policy limits may range from $1 million to $10 million, depending on the policy and the insurance company underwriting the policy.

 

Excess liability

For companies in business that have potentially higher liabilities, can secure an excess liability policy that kicks in after the umbrella policy is breached.

This coverage provides extra liability limits over an umbrella policy. This coverage typically follows the terms of the first underlying insurance policy.

Higher limits may be necessary for businesses with high loss potential, high profile, sizable sales, numerous assets, large auto fleets, worldwide presence, and/or significant public exposure.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Are You Covered for Personal Use of Company Vehicle?

Getting a company car is a coveted perk for employees, but it can also cause some coverage issues with your personal auto policy.

The standard auto policy excludes coverage for non-owned vehicles furnished or available for your regular use.

This means you are relying solely on the company’s insurance for protection. If for any reason the company’s policy does not respond if you are in a traffic accident, you have no coverage.

The company’s business auto coverage will also not provide you protection if you use the vehicle outside the scope of the employer’s permission. This can leave a big gap if you or a family member use the vehicle in a way that wasn’t part of the original agreement.

 

Nightmare scenario

Your company gave you permission to use the car, but you are the only one allowed to drive it. Your spouse takes the company car to the grocery store and on the way she crashes into another vehicle.

Unfortunately, you have no coverage on either your policy or the company’s policy. In other words, you would be on the hook for damage to the vehicle and possibly the other vehicle, as well as for medical costs for any injuries sustained by either party in the accident.

 

The solution

If you are given a company car, you should consider adding an “extended non-owned coverage for named individuals” endorsement to your policy. You should name each member of your family of driving age.

This endorsement will fix the gap in coverage when an employee is furnished an auto for their regular use (or even has one available for their regular use out of a pool of vehicles). But, note that this is only for liability coverage and there is not going to be any physical damage coverage for the vehicle.

This endorsement is inexpensive and can provide peace of mind. It is a good idea anytime you have regular access to a vehicle you do not own.

If the insurance company won’t add the extended non-owned endorsement (or a similar one) to the personal auto policy, or can’t add it, the next option would be to buy a named non-owned policy to fill the gap in coverage.

In effect, this accomplishes the same thing as the extended non-owned coverage for a named individual, but may be more expensive.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

 

 

 

Identity Theft Goes Beyond Online: Shred Docs

Much has been made of people’s identities being stolen through cyber attacks and other online means, but the majority of identity thefts are still being carried out the old-fashioned way by criminals finding documents bearing social security numbers and other personal information.

Identity theft is a growing problem with consumers reporting more than 490,000 incidents in 2015, up an astounding 47% from the year prior, according to the Federal Trade Commission.

Certainly, a good reason for this increase is online data theft, but a surprising number of Americans are still having their personal information stolen because of improper disposal of paper documents.

The best way to combat this kind of identity theft is by regularly shredding paper documents when it’s time to dispose of them. But what documents should you shred and which ones can you just toss in the recycling bin? Here are our tips:

Anything containing your social security number – This is the number one bit of data that identity thieves want to get a hold of. With your Social Security number they can open checking accounts and credit cards – and sometimes even take out loans.

Your social security number can be found on a number of documents, including:

  • Pay stubs
  • ax returns
  • Medical bills
  • Health insurance cards
  • Loan statements

Bank and mortgage statements – First off, you should keep these statements for up to seven years for tax audit purposes. After that time, there is no need to keep them and you should dispose of them.

These documents should be shredded. While they sometimes may contain your social security number, they do contain your bank account statements and crafty scammers can produce bogus checks that they can use to cash checks from your accounts.

Utility and other bills – Utility bills may contain personally identifiable information. Experts recommend that you keep these bills no more than a year. To avoid having your data exposed, you should then shred them.

Anything with your signature – It’s highly recommended that you shred any documents that have your signature on them.

That’s because a clever criminal can learn to copy your signature, and combined with other personally identifiable information they get their hands on, they could open accounts in your name and do real damage to your credit.

Receipts – While you may want to keep some receipts for your tax records, any others you don’t need to shred and can toss into the recycling bin.

Credit card receipts don’t contain your entire credit card number, so you don’t run the risk of someone gaining access to your card should they come across these receipts.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Fix Deck Problems Before Someone Is Injured

Everyone loves to spend time on the deck with the family or entertaining. That’s why you bought a house with a deck or you built one yourself.

Decks are part of the American way of life, but they require upkeep as they are subjected to the elements all year long from hot summer months and cold, rainy or snowy winter months – and everything in between. Collapses happen regularly and people are injured because the owners failed to maintain their deck.

Here are the main things you should look for to reduce the chances of a collapse or other incident.

 

Splintering boards

It’s imperative that you check your boards annually. The weather changes from the hot summer months to cold and harsh winters (all of this varies by region, of course), which can lead to splintering. Splintering decks can cause cuts and scrapes, splinters and tripping hazards. Someone wearing flip-flops on the deck can sustain a nasty gash from a splintering board.

If you notice any splintering, you should remove the splinters and inspect to see if the entire board needs replacing.

 

Handrails

As time marches on and the various weather conditions of the seasons take their toll on your deck, handrails can become less secure and wobbly. Here’s what’s going on: Warm weather expands the wood, leaving room for the nails and screws to become loose and move. When the cold weather comes and the boards contract, the nails may be in a slightly different position, which when summer comes will make the handrail even less stable.

If a handrail is wobbly or bending, it may be time to replace it.

 

Stairs

This is another area that causes hundreds of injuries every year. Wear and tear and weather can loosen the stairs much like handrails, but there is an added danger if one step collapses or becomes loose as they can pose tripping hazards, if not worse.

If stairs bend when you walk on them or there are splits or splinters in the wood, you should inspect the steps to see if they need replacing.

 

Posts

The posts are potential access points for termites, wood-boring beetles or dry rot. Not only that, but the posts are the main support for your deck so it’s imperative they remain free of infestation from pests, lest you want to risk the stability of your deck.

If the wood is splitting or decaying, you can inspect it by inserting a flathead screwdriver into the cracks or splits. If you can insert it more than 1/4 inch into the wood and the wood feels spongy, you should call an inspector and replace as necessary.

 

Protruding nails and screws

As mentioned in the handrail section, nails and screws can loosen and start working themselves out of their holes. If they start working their way out, they can protrude from the floor of your deck and cause snag and trip hazards. Not only that, but loose nails and screws can cause boards and support structures to become less stable.

 

Prevention

Inspection tip

Get down on your hands and knees periodically and crawl around your deck, which will give you an excellent vantage point to see splinters, raised nails and other hazards that are hard to spot from an adult’s perspective. Seeing the world from your pet’s or child’s point of view will help you spot problems before they become real dangers.

 

Sealer and stain tips

The best way to prevent wear and tear on your deck is by applying a coat of sealer annually. Sealers protect against moisture that causes rot and splitting, last one cycle of seasons and should be reapplied each year.

Also, if you have used stains, paint-maker A.G. Williams recommends that if they are transparent or semi-transparent, you apply sealer on an annual basis. Solid states, which are almost like paint, provide several years of protection and should be recoated every four or five years.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Settling Claims on Your Own Risks Voiding Your Policy

While your insurer has the responsibility to investigate and pay claims made on your firm’s commercial general liability policy, you also have responsibilities to ensure your claim is paid.

Two of the key parts of your responsibilities are:

  • Notifying your insurer of the claim as soon as possible.
  • Not taking the claim into your own hands before notifying the insurer.

Commercial general liability (CGL) coverage is usually written on an occurrence basis, meaning that the policy will cover events that occur during the period the policy is in force. In other words, if an occurrence hits towards the end of the policy and notification is made after the policy lapses, the insurer would still be required to cover it.

Let’s look at your responsibilities under a CGL policy after occurrence that may lead to a claim.

 The late claim

Under the standard CGL policy, you are required to notify the insurance company of an occurrence that may result in a claim being filed against the policy “as soon as practicable.” Practicable, however, is not defined, but courts have generally ruled that it means “as soon as possible” or the time in which a reasonable person would have filed the claim.

The rule of thumb is to contact your insurer or us as soon as you think you may have suffered an event that will require a claim to be made.

Most certainly, if you file a claim so late that it compromises the insurance company’s right to settle the issue, then this would be deemed a violation of the policy.

The provision spells out the specific items that should be sent to the insurance company. It requires that you authorize the insurance company to obtain additional records and information, and cooperate with them in the investigation of the claim.

There have been numerous court rulings that have demarked when is too late, like the case of Dallas Plaza Hotel.

 The dawdling hoteliers

A U.S. Circuit Court of Appeals in 2016 held that Dallas Plaza Hotel had waited too long to file a claim with its insurer after suffering hail damage in July 2009.

The court ruled that because the hotel had waited more than 19 months to file the claim, it was impossible for the insurer, American Insurance Co., to ascertain exactly when the damage had occurred.

The hotel’s property policy required that the insured make “prompt notice” of any claims.

 Settling matters yourself

The other way to get the claim voided is by doing the following without the insurance company’s consent:

  • Making any voluntary payments
  • Assuming any obligations
  • Incurring any expenses (other than first aid).

In short, the insurance policy bars you from settling the matter on behalf of the insurer and then seeking reimbursement from them.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Drone Liability a Serious Threat to Your Assets

Some personal drone enthusiasts push the limits on how they use their drones, put people’s lives in danger – and sometimes hamper public safety efforts during emergencies.

The problem of individuals flying their drones into disaster areas surfaced in 2017 during the aftermath of Hurricane Harvey. The authorities had to issue warnings for drone operators to stay away from rescue areas after several close calls with rescue aircraft.

And during the 2018 fires in Northern California, the state had to call off firefighting-plane flights on more than 30 occasions because drones were illegally flying in the area.

If any of these drones were to cause an accident, the human and financial cost could be staggering. Likewise, if your teenaged son injures someone or causes property damage with his drone, the liability would likely fall squarely on you.

Even if you fly your drone responsibly, accidents can happen, injuring a third party or damaging their property. Often though, you won’t need to buy a separate drone policy if you have homeowner’s or renter’s insurance.

 

What homeowner’s covers

Besides covering your home and property against fire, leaks, theft and other risks, the standard homeowner’s insurance policy also covers liability claims, like if you crash your drone through your neighbor’s window.

 

There are two coverages that come into play:

Property damage

If you crash your drone into your own living room window, since the drone is your personal property, you may file a claim against the drone and your insurance may pay you out for the damage, after deductibles. Insurers in this case would likely treat your drone like a remote control aircraft.

 

Liability

If your drone injures a third party, your homeowner’s liability coverage would pay their medical bills. Be warned though, if the costs exceed your policy limits the injured party may sue you and you could be on the hook for further damages. The liability portion of the policy would, however, likely cover your legal fees.

Still, you may want to check your liability limits and talk to us to see if they are adequate. Often minimum liability limits in homeowner’s policies may not be enough if someone is seriously injured or loses an eye. If you are regularly using your drone in areas where there are other people, you may want to consider increasing the coverage if you can.

Most homeowner’s insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available and, increasingly, the Insurance Information Institute recommends that homeowners consider purchasing at least $300,000 to $500,000 worth of liability coverage.

If you still feel like your liability coverage won’t be enough and want to enjoy playing with your drone, anxiety-free, consider an umbrella policy.

 

Umbrella coverage

Umbrella coverage gives you an additional layer of liability coverage for more serious incidents of injury or property damage to a third party. After all, medical and legal expenses can add up quickly and you likely don’t have the cash lying around to cover any excess amounts above your homeowner’s insurance policy limits.

Invest in this type of coverage if you want to protect your assets.

Umbrella coverage consists of bodily injury and property damage liability coverage. It will cover:

  • Injured party’s medical expenses
  • Third party property damage
  • Legal expenses if they sue you.

 

The coverage comes in increments of $1 million to $10 million or more. The premiums are affordable and range around a $300 or $400 a year for each $1 million in coverage.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Adult Children and Your Liability if They’re Negligent

If you have an adult child who you are still paying some expenses for, or they are studying in college (living either away from you or at home), you could still be held liable for any damage they cause through their own negligence.

They may even have their own car insurance, in their own name, but if your child ends up injuring someone severely and is sued and the policy limits on their car insurance are not enough to cover the judgment, you could still be held liable for damages that the policy didn’t cover, depending on the circumstances.

And your car insurance or homeowner’s insurance won’t cover it, meaning you’d have to pay out of pocket if your child cannot.

That said, aside from car accidents, negligent and/or intentional acts that damage someone else’s property or injure a third party could be covered under your homeowner’s policy and an umbrella policy.

For the purposes of this article, we are talking about mostly an adult child under the age of 25 living at home or away at college. The key factors that would possibly trigger homeowner’s or umbrella coverage in terms of parents having some liability for their adult child’s actions are:

  1. Their continued financial support of the child, and/or
  2. That the child lives under their roof.

 

The car insurance issue

There may be occasions when parents of a 20-year-old reckless driver who is either still living at home or away at college may want to take steps to separate his liability from their own, like:

  • Putting the car he drives in his name.
  • Removing him from their auto insurance policy.
  • Requiring him to buy his own insurance (they may figure also that if they make their child pay the premium, the financial pain will reform his driving habits).

When you remove a young adult driver from the family policy, you reduce the probability of a claim for property damage, first party and third party injuries, and other liabilities that may result from an accident.

It would reduce the parents’ auto insurance premiums and push the liability to the child’s insurance. However, if they are sued for extreme negligence and the award exceeds the policy’s liability maximum, the additional award could be on your shoulders if your child doesn’t have the personal resources to pay.

Your own car insurance would not cover it and, since it’s auto-related, the homeowner’s policy wouldn’t cover it either.

 

Coverage explanation

The scope of coverage for minor and adult children under their parents’ homeowner’s policies, with respect to personal property coverage and personal liability coverage, rests on the policy definition of “insured” in the typical policy.

The definition, in pertinent part, includes relatives who are residents of the named insured’s household. Children, brothers and sisters, parents and grandparents are examples.

This doesn’t mean that your 40-year-old daughter who is over for dinner is covered, though, since a visitor is not a resident.

Also, the policy will cover persons under the age of 21 in the care of the named insured (such as a foster child), as well.

The next time your homeowner’s or renter’s policy is up for renewal, please call us and let us know if you have any grown children and what their status is in terms of living arrangements, and any financial support that you may provide them. It will help in determining who is and who is not covered in your family and household.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.