One of many momentous occasions in our lives is when we move in with a significant other. Today that significant other may not be simply classified as husband and wife through a formal marriage. Almost gone are the days when we define a couple by marriage and the assumption of a traditional male and female pairing. The changing of those society norms are slowly making their way into the insurance marketplace.
Key words to describe a single person are usually young, carefree, and wild, with no responsibilities. Insurance losses are reflected in that lifestyle. The higher loss experience is reflected in the rates those individuals are charged. When changing their status from single to a committed relationship, a person’s lifestyle will undergo many changes. The benefits can be much more than companionship, love and affection; it can affect the couple financially.
Insurance rates are not magical numbers pulled out of thin air. The insurance companies gather data from their clients experience and merge it with statistics from Federal Highway Safety Administration, and a number of other organizations to develop actuarially sound loss projections. From that data they can predict the loss experience of their insured drivers by age, education level, marital status, credit history, moving violation and loss history, and even by the couple’s respective employment.
Traditionally, when a couple marries they become eligible for various insurance discounts. When a couple is living together in a committed relationship those same discounts can be utilized with many companies.
While single you each operated your own cars and had separate insurance policies. Why pay for two separate insurance policies? As a couple you tend to travel together generating fewer miles on one or both cars. Recognizing that, the couple is eligible for the “Multi Car Discount”.
If you own a home and have homeowner’s insurance packaging you home and auto policy can generate a savings discount.
You may now be commuting together. That means one of their cars is not generating the number of miles that might be expected otherwise; a Car Pooling discount may be available.
Insurance rates are heavily impacted by your credit rating. It has been statistically shown that persons with poor credit tend to have more losses. If a couple is going to combine their insurance policies, consider who has the better credit score. If that individual is presented as the first named insured, the policy is going to be rated with their credit score.
Merging your insurance can result in a savings for one and cause the other to pay more. This is particularly true when one partner has adverse loss or violation history. If over the last 3 years one of you has experienced losses or moving violations, while the other has not, the adverse experience will adversely affect both of you. You might consider waiting for some of that loss experience to drop off your record before trying to take advantage of all the potential discounts.
These are just some of the discounts you could benefit from. A good insurance agent ways should be able to guide you to optimally take advantage of these discounts.
The discounts you miss from going on line or calling an 800 # might not be the only disadvantage you experience. Few adults have ever had someone take the time to explain what insurance limits are appropriate for you. Combining your driving habits with your partner may warrant higher limits. A simple fender-bender could have long term financial consequences to both of you with inadequate coverage. Having the RI State set minimum limits does not mean you are protected if the loss generates an award above those limits. Many insurance companies now charge more for the minimum limits than higher ones.
Pooling you assets is exciting. Properly protecting them should not be overlooked and it does not have to cost more. Take the time to get some proper insurance guidance as it could truly affect your future together.