Married life is a huge change from single life. Aside from the emotional changes that occur after marriage, there are a whole bunch of financial changes as well. Auto insurance is one of the big expenses in your life that is almost guaranteed to change once you get married.
Marriage and auto insurance
It might not sound fair that younger men have to pay more than older women but that’s the way auto insurance works. The more likely a company thinks it is that you’ll have a claim, the more they’ll charge you for insurance.
Insurance rates are based on the historical data that the insurers have collected. In the case of auto insurance, the data suggests that people under 20 are the most at-risk drivers, that men have more accidents than women, and that unmarried people are riskier to insure than married people.
There are a few theories about why married people historically drive better than unmarried people. Generally, people are older when they get married, so they’re more experienced drivers and less prone to accidents. Another theory is that married people drive more cautiously because they have kids or other family-related responsibilities to encourage safer habits. Whatever the reason, telling your insurer that you got married can lower your auto insurance rates.
To combine or not to combine
If you’re unsure about whether to combine auto insurance policies with your new spouse or to keep things separate, you’re not alone. Like the debate over whether to have separate or joint bank accounts, there are benefits and drawbacks to each. The decision of whether or not to combine auto insurance policies really comes down to how your finances are organized.
Think about your situation, and the impact of sharing the policy. In a case where one spouse has a clean driving record and the other has a spotty record filled with accidents, combining policies would make the responsible spouse’s rates rise, while causing the irresponsible spouse’s rates fall. The same applies if one spouse has a more valuable car or drives significantly more. The insurance companies basically average out the risk involved and charge people accordingly. That’s an important thing to know about auto insurance.
For couples with separate finances, it is not in the responsible spouse’s best interests to combine policies. For couples with joint finances, paying for the higher policy and lower policy out of the same account renders the changes moot.
Combining policies also allows for multi-vehicle discounts, where the insurer provides a discount to clients who insure more than one vehicle. Discounts can also be had if you bundle your auto insurance with your homeowner’s insurance, your life insurance, or your health insurance, depending on the company.
Getting married should be the happiest day of your life. In the weeks following the wedding, big financial changes will be afoot. One of the biggest positive changes a person can make is to visit insurance brokers to get quotes on new policies for married couples. Whether combined or separate, there are a lot of decisions to make about you money.