Chances are, car insurance wasn't the first thing you thought of after the proposal. In fact, you might not have thought about how marriage might affect your car insurance rates at all. But after the decorations have been cleared and honeymoon adventures logged, you'll want to consider adding "check on combining car insurance policies" to your newlywed to-do list. Car insurance is usually cheaper for married couples — with a few important caveats.
No Matter What, You'll Likely Save
Even if you do absolutely nothing, the sheer fact of being married is likely to have a positive impact on your rates once your policy is up for review. The Zebra, a car insurance comparison engine and digital auto insurance agency, projects a premium savings of 10-12 percent when all other factors remain the same.
Why is this the case? According to Frankie Kuo, an auto insurance specialist at Value Penguin, "Insurers find married people less likely to file a claim compared to single drivers of comparable profile, and so consider them less risky to insure."
When Combining Policies Makes Sense
To nab an even steeper discount, consider combining your car and your beloved's in a single policy. This makes the most sense if you both have spotless driving records and no recent gaps in insurance coverage, Esurance explains.
Remember, too, that in addition to lower rates, having two cars on the same policy can often earn you multi-car discounts from insurers. Moreover, even if your household only has one vehicle, you can still earn discounts for sharing a policy.
"Even if a family only has one car, we would still recommend a single policy that would cover both drivers, since it ensures that both drivers are insured without incurring the extra cost of a second policy," says Eric Madia, vice president of product for Esurance.
Finally, combining your auto insurance policy with existing homeowners' or renters' policies from the same company could lead to even greater discounts overall.
Take a Combined Policy Test-Drive
Many factors shape one's insurance premium, and driving is only one of them. In some states, insurance companies use credit scores as one element in determining rates. So you may have some choices to make, based on your separate driving and financial histories.
For example, what if your spouse has a decent driving record but a poor credit score? Or what if you're a great money manager, but your lead foot has recently scored you a speeding ticket?
You should first get a quote for adding your spouse to your insurance or vice versa, says Jean-Marie Lovett, president of independent insurance agency MassDrive Insurance Group in Boston. Asking for a quote doesn't obligate you to follow through with the change. (If your spouse is a champion speeding-ticket holder, however, you might have to list him or her as an excluded driver in your household. More on that in a moment.) Lovett says it's a good practice to first get quotes for two drivers on one policy.
If putting the policies together does not help you save on the premium, you can just list your spouse on your policy and defer them to their own individual insurance, Lovett says.
When it comes to credit scores, one of the smartest things you can do is place the person with the best credit score as the primary named insured. "Their credit is the one that will be portrayed to the insurance company," Lovett notes, "and will be the credit score that the insurance company will rate off of."
Keep in mind this is only true in states where it's legal to use credit scores as a rating factor. Some states, such as Massachusetts and California, do not permit the practice. In that case, Lovett explains, the person with the best driving record should be the primary insured.
Still unsure on whether to combine policies? It can help to know the value of your cars. "Maybe your spouse has a good driving record," Lovett says, "but a junker of a car."
"If you have a 1995-2005 vehicle, you should debate whether to have collision coverage, or increase the collision deductible to $1,000," she continues. "Cars that get over the 10-year-old mark tend to take a significant drop in value, and you want to weigh the cost of the collision coverage on the vehicle versus the actual value of the vehicle." She adds that in the event of an accident, having the $1,000 deductible "gives you the option to junk the caror make a claim while keeping your insurance premium manageable."
When Not To Combine Policies
Though you're now joined in holy matrimony, there are some cases in which it just doesn't make sense to bring that partnership to your car insurance. Esurance warns that if one of you has a truly poor driving record, separate policies could end up costing you less.
"Combining a low-risk driver's policy with a high-risk driver's will likely increase the low-risk driver's car insurance rates," according to Esurance. There's also the chance that your insurance company simply won't insure your accident-prone partner, no matter the cost. "If one spouse has more than three accidents, your insurance carrier may not accept the spouse," Lovett says.
Here's where the really bad news comes in: Even if you don't combine policies, simply living under the same roof as a high-risk driver could have a negative impact on your car insurance rates.
Esurance explains why: "Because insurance companies consider the driving histories of all family members living within the same household when underwriting policies, having a high-risk driver under your roof makes you riskier by association." Car insurance follows the car, so your policy would have to cover the damage if your spouse caused an accident on an errand in your vehicle, for example.
There may be a way around this, though. "In most states, you are required to list all drivers in your household on your policy," Lovett says. "However, you can 'defer' someone, meaning they have their own insurance policy."
Also called a driver exclusion, this is an easy way to keep insurance costs low, even if your spouse is high risk. Keep in mind that exclusion truly means excluded: If your spouse borrows your vehicle and gets into an accident, you're responsible for any and all damages.
The Bottom Line
"Nine times out of 10," Lovett advises, "it will be beneficial to merge the insurance" for a newlywed couple. And if it doesn't make sense right now, Kuo recommends doing what you can to mitigate your high-risk profile. Taking a certified defensive driving course may unlock an automatic discount, or at least facilitate a negotiation for lower rates.
"Having a spotty record is inconvenient, but people usually have a chance to get lower rates just by shopping around and comparing prices across companies," Kuo adds.
Additionally, Kuo points out that minor traffic violations usually do not haunt a driver's record for more than three years. Staying clean for that long can also remove a driver from the high-risk pool.
Even if you can't combine policies immediately, Kuo recommends taking another look at your insurance every now and then. If couples think it makes sense to combine their policies, they can meet with their agent for a review. "Many circumstances of life could change, such as work, age and even where they live," Kuo says. As always, obtaining quotes from multiple companies can help you get the best deal.
