With few
exceptions, getting married will lower your auto insurance rates. But the
reason is misunderstood by most consumers. Car insurance companies calculate
their policyholders’ premiums based on the likelihood of their filing claims
during the time period covered by their policy. This claims risk is determined
by a proprietary formula used by the insurer. If you understand the variables
used in this formula, you’ll have a much firmer grasp on how to find lower auto
insurance rates.
When you
get married, the factors that influence your premiums include adding multiple
cars to your policy, changing your address, and consolidating multiple types of
insurance. We’ll cover each of these areas in detail below.
The
Multi-Car Discount
When you
and your partner are living in separate households, your respective vehicles
are covered under separate policies. Married couples living under the same roof
can abandon one of the two policies and add both vehicles to a single policy.
Doing so usually yields lower rates. Auto insurers assume the aggregate number
of miles driven by both spouses while living under the same roof will be lower
than the number driven while living in separate homes.
When you
comparison shop car insurance companies, you’ll notice some will neglect to ask
whether you are married. This is rarely an error of omission. Instead, insurers
are more interested in whether two people living in the same household plan to
share a policy. It implies fewer aggregate miles driven.
Change Of
Address
It’s not
uncommon for one or both partners to change living addresses after getting
married. In many circumstances, this too, can potentially lower your premiums.
First, a change of address may involve a lower likelihood of filing claims due
to theft, vandalism, or traffic accidents. Essentially, some zip codes
represent a lower risk than others. If you move to an area that has
historically produced fewer claims, you may enjoy lower premiums.
The second
reason involves the average number of miles driven following the relocation.
Your daily commute to your place of employment may be shorter. The venues you
regularly visit may be closer to your new home. These factors imply that you’ll
be driving fewer miles and thus, less likely to file a claim. Your auto insurance
company may apply a low-mileage discount.
Consolidating
Multiple Types Of Insurance
Insurance
companies want to attract as much of your business as possible. In the same way
financial institutions sell multiple products (e.g. checking accounts, savings
accounts, loans, CDs, etc.), so too, do many insurers. After you get married,
you’ll become a potential customer for various insurance products.
For
example, if you and your spouse are moving into a new home, you’ll need to
invest in a home insurance policy. If you intend to start a family, you’ll need
life insurance and supplemental health insurance coverage. By consolidating
these policies with a single insurer, you’ll have more leverage to request
lower rates. In fact, many insurers will extend a formal “multi-line discount”
when you bring multiple policies under their roof.
Lower
Likelihood Of Filing Claims
Auto
insurance companies perceive married people through a different lens than
single people. Their data suggests that those who are married tend to be more
responsible behind the wheel. They make better decisions on the road. They take
fewer risks. There are many reasons why this might be so. For example, married
people might take fewer risks because they have families for whom to care. Their
lives are now closely intertwined with their spouses and children, so every
decision made while behind the wheel is made in that context.
Whatever
the underlying reasons, they lead to the same conclusion: married people are
less likely to file claims. Thus, car insurance companies are usually willing
to extend a discount on their premiums.
Getting married often results in lower car
insurance rates (assuming both partners have good driving records). But you
should still take the time to compare multiple insurers at least once a year.
Millions of people pay more than necessary for their coverage simply because
they neglect to comparison shop. Doing so only requires a few minutes.
Moreover, you can shop for lower car insurance rates online. It’s the only reliable
way to find the coverage you need at the best possible price.
