Auto Insurance: Spousal Switch For Lower Rates?

Married couples often pay lower premiums than single drivers. This is because insurance companies view married people as more financially stable and safer drivers. However, it's important to consider your spouse's driving history before creating a joint policy. If your spouse has a poor driving record, your insurance premiums may increase. In most cases, you will move from having two separate policies to a single policy that covers both of you. This can save you money, as insurers offer lower rates for multiple cars on one policy.

Spouse's driving history

A spouse's driving history can have a significant impact on auto insurance rates when switching to a joint policy. While married couples often benefit from lower insurance rates due to perceived lower risk and financial stability, the advantages can be negated if one spouse has a poor driving record. Insurers consider the driving history of both spouses when determining rates, and a history of accidents, violations, or reckless driving can result in higher premiums for both partners.

When considering a joint policy, it is crucial to review both spouses' driving records. If one spouse has a history of violations, such as DUI or reckless driving, it may be more cost-effective to maintain separate policies. By excluding a high-risk spouse from the policy, the other spouse can avoid the negative impact on their rates. However, it is important to note that excluded spouses will not be covered if they drive the other's vehicle and cause damage.

In some cases, a spouse with a clean driving record can help offset the other spouse's violations or accidents. Their positive driving history may result in a more competitive rate for the couple. Additionally, sharing a policy is generally cheaper, as costs are split, and multi-car discounts may be applicable.

It is worth noting that some states allow spouses to be excluded from a policy for specific reasons, such as not having a license or already having separate coverage. On the other hand, certain states mandate that all licensed household members be included in the policy, automatically covering spouses. Therefore, it is essential to understand the specific requirements and options available in your state.

Discounts for married couples

Married couples can avail of several discounts on their car insurance. While there is no specific "marriage discount", couples can save money by availing of discounts that are now accessible due to their marital status.

One such discount is the multi-car discount, which can be as much as 25% off. If both spouses own a car, insuring both vehicles under one policy can result in significant savings. It is also easier to manage a single multi-car policy than two separate policies.

Another discount married couples can benefit from is the multi-policy or bundling discount. This discount is available when couples combine all their insurance policies with a single company. For example, if a couple uses the same insurer for auto insurance and homeowners insurance, they are likely to receive a discount.

Married couples are also eligible for a homeowner's discount. Homeowners are generally considered financially stable and low-risk, so companies like Liberty Mutual, Progressive, and Travelers offer discounts to homeowners. It is not necessary for homeowners and auto insurance to be with the same insurer for the couple to be eligible for this discount.

Furthermore, insurance companies view married couples as more financially stable and safer drivers, less likely to be involved in accidents and file claims. This assumption results in lower premiums for married couples.

It is important to note that if one spouse has a bad driving record, poor credit history, or a more expensive car, the premiums for the joint policy may increase.

Multi-car discount

One of the benefits of getting married is that you may be able to lower your auto insurance rates. Most companies offer cheaper rates for married couples, assuming reduced risk and greater financial security.

A multi-car discount is a great way to save money on auto insurance if you are married. By insuring multiple cars under the same policy, you can benefit from a discount of 10 to 25% on your premiums. This type of discount is offered by most major insurance companies, including Geico, State Farm, Progressive, and Travelers.

To get a multi-car discount, you and your spouse will need to be listed on the same policy. This is usually a requirement for married couples living in the same household. By sharing a policy, you will not only save money but also streamline the insurance process by having one recurring payment and a single policy renewal date.

When applying for a multi-car insurance policy, you will need to provide information about each car and driver. This includes vehicle identification numbers, approximate mileage, primary drivers, and driver's license and social security numbers.

It is worth noting that a multi-car discount may not always be the most cost-effective option. If your spouse has a poor driving record, you may end up paying more due to higher rates charged by insurance companies. Therefore, it is recommended to compare quotes for both multi-car and single-car policies to find the most affordable option.

Homeownership

When it comes to auto insurance, adding your spouse to your policy is usually required if you share the same household. A joint policy can lead to lower premiums and multi-car discounts. However, it's important to consider your spouse's driving record, as a poor history may increase your rates. Overall, homeownership and marital status can influence auto insurance rates, but the impact varies depending on other factors related to your specific situation and insurance provider.

Credit score

The exact credit score required to secure lower insurance rates varies between providers and states. For example, a score of 750 or above may be considered good by one company, while another may require a minimum score of 700 to offer their best rates. Additionally, different scoring models, such as FICO and VantageScore, may have different scoring ranges.

While the specific criteria for calculating credit-based insurance scores vary, they generally take into account factors such as payment history, outstanding debt, length of credit history, pursuit of new credit, and credit mix.

It's important to note that California, Hawaii, Massachusetts, and Michigan have banned or limited the use of credit scores in determining insurance rates. In these states, insurance companies base rates on factors such as driving records, location, and other characteristics.

To improve your credit score and potentially lower your insurance rates, you can take several steps, including paying your bills on time, minimising hard credit inquiries, monitoring your score regularly, maintaining old lines of credit, and managing your credit utilisation ratio.

Frequently asked questions