Yes, this is normal that an insurance company does not want to take your daughter off of your policy since she is in college so close to your house and because your house is her permanent residence. This is true of car insurance companies in Iowa and all other states.

Insurance company guidelines differ with regards to if you can take your child off your auto insurance policy when they leave and go off to school (college, university, etc). Many insurance carriers will still require you to keep your child on your policy however depending upon how far away your child is attending school you may be able to get a discount.

Insurance companies recognize that when college students come home (for winter, spring and long summer breaks) they have access to the family car and thus want to keep them on the insurance policy. If the child’ school is close enough that he or she may be able to come home more often, say on the weekends, and so has more access to your vehicles for driving than in the eyes of an insurance company that is even more of a reason for the child to remain on your policy.

Since your daughter is only 10 miles away than your insurance company's guidelines, as most would, appear to require her to stay on your policy. While she may be living on campus being only 10 minutes away it would be easy for her to return home and use your vehicles and thus your insurer wants her to remain on the policy to be covered. If she truly does not drive your vehicles at all anymore than you may see if your insurer will allow you to exclude your daughter from your policy. If you did exclude her than if she did drive your vehicles at any time she would not be extended any coverage and thus leaving her and you, the car owner, responsible if she was in an accident.

Many insurance companies though will reduce the premiums if the college / university your child is going to is more than a specific distance (100 miles, for example is the norm) from your home since their use of your car is lowered and thus are less of a risk to your insurer. Since your daughter is so close to home at her college this would not apply to you. You may however see if your child was a primary driver on a car if she can be bumped down to an occasional driver which should also reduce your premium rate. If your daughter gets good grades you can also ask about a good student discount.

Most parents continue to claim their college students on their personal income taxes as a dependent until their child is earning their own living and paying their own taxes. Though liability laws in each state vary in general this means that if your daughter were to drive and have an accident, you may be the one sued for the liability of your dependent child's car accident. Also keep in mind though your daughter is "away" at college and thus may not have the use of your car it does not mean she will not be driving a friend’s car and though the car owner's insurance would be primary it is wise to still carry auto insurance on her that could be used as secondary insurance on a friend's vehicle.

A benefit of keeping your child on your policy is that they will have continued car insurance on them. This should help your daughter in the future when she goes to buy her own car insurance policy. Rates are generally higher for a person without prior continuous insurance coverage or who has not been a primary driver in recent years.

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