There are few things more life-changing than getting married. Ideally, a marriage represents a couple’s love and commitment, so strong it was deemed worthwhile for the government to know about it. There’s a lot of weight behind the decision to continue your life as half of a shared partnership. Of course, the effects of a marriage extend considerably beyond a relationship; what might begin with romance is ultimately sealed in legalities and shared finances.
While you may not be surprised to hear that getting married will affect your car insurance rates, newlyweds - particularly young couples - are often taken aback by the insurance discounts suddenly afforded to them. Although there are cases where a spouse’s poor driving record limits opportunities, the potential discount on your insurance rates after getting married could be quite significant, especially if you exploit all possible advantages.
Can being married really lower your car insurance rates?
While it’s certainly not a rule of law mandated for insurance providers by default, it is common practice for discounted rates to be given to customers purely on the merit of being married. A broad rate analysis has found an average discount of 11% for married drivers across states; another study even found that a single 20 year old could pay as much as 21% more on their auto insurance than a wedded person with otherwise identical characteristics. While the actual extent of this discount is influenced by a range of factors including the state or region and provider in question, a married couple only stands to benefit on their rates.
For many, this significant drop begs the simple question: why? After all, a marriage has no practical effect on a person’s skill or safety as a driver. The insurance companies certainly don’t offer this as a simple wedding gift either.
As it happens, the answer is about as cold and methodical as you would expect from the insurance industry. All insurance rates are determined based on accumulated statistics. Insurance studies consistently find that married customers are safer on the road, and prone to less accidents than people who are single. In a DMV-cited 2004 study the National Institute of Health arrived at the findings that unmarried drivers were statistically twice as likely to be injured as their wedded counterparts.
There are numerous explanations for why this might be. For starters, a natural correlation can be found between the responsibility of “settling down” a marriage often denotes and prudence in the driver’s seat. As married couples tend to produce offspring, a parent’s natural instinct while driving their children lends itself to safer driving practices. While there may be no direct link between safe driving and marital status, the numbers all point in one direction, and the insurance companies abide by it.
This isn’t the only case where seemingly arbitrary demographic factor into insurance rates. By the same statistical reasoning, males under the age of 25 are faced with significantly higher base rates than anyone else, including their female counterparts. Incidentally, couples who get married young may stand to get the most helpful discount while the ageist policy is slanted against them. Whether or not this system seems fair to the individual customer, it is the safest way for an insurance company to conduct itself when the sum of all cases are considered.
Is a combined policy with your spouse worth it?
In a marriage, it’s relatively common for couples to merge their finances together. In insurance terms, this can manifest itself as a combined policy. By merging your family’s insurance needs in a package, you may be privy to a lower cost in total, in addition to the base marriage discount.
Signing on a combined policy reduces the amount of paperwork you’ll need to keep track of as a couple; even if you’re part of a demographic that insurance companies are slated against by default, you could stand to benefit a lot by joining forces on the insurance front. A beneficial combined policy can save the couple an extra 10-20% off their rates compared with doing it alone.
While you should never need to worry about your marital status negatively affecting your base rate, a combined rate can actually raise your total costs if the circumstances are less than ideal. This may happen if the insurance history or needs of you and your spouse are sufficiently different.
For instance, if your spouse drives a high-value car with appropriately high premiums and your car is cheap by comparison, your policy would rise more than it’s worth. Things are best kept separate as well in the event that one has a pockmarked driving history. However, if your respective records and insurance needs are relatively similar, a combined policy will put both of you further ahead.
It should be noted that similar arrangements are available as well for common law and domestic partnerships. As always, the specifics will depend on the insurance provider you’re dealing with.
What happens to insurance rates in the case of divorce?
A divorce is an incredibly stressful and trying ordeal. Even in the smoothest circumstances, the dissolution of marriage brings a lot of bad feelings with it. While a changing insurance rate will no doubt pale in comparison to the other issues at the time, it’s nonetheless something you’ll have to contend with if and when a divorce occurs.
When the divorce is finalized and the insurance company is apprised of the circumstances, your insurance will be adjusted back to the level of an unmarried person. This will include an annulment of the combined spousal policy. While you’ll never be penalized for being part of some “divorced demographic,” the loss of the discounted edge can feel like a significant blow from what you’re used to, especially if your combined policy and married status saved you from higher rates by default.
The pang of divorce will be felt in direct proportion to how much the marriage helped your rates in the first place, and the consequences of annulment will often be felt more harshly on one spouse than another.
When the divorce is legally finalized, you are obligated to inform the insurance company of the change within 30 days; the deadline to update your insurance may vary across state lines. Although some divorced pairs may try to make a combined policy work well after the fact for mutual benefit’s sake, it’s recommended that you remove your spouse from your policy to protect yourself from legal ambiguities and complications from the insurance company or spouse.
Getting divorced brings an array of new challenges along with it, and while car insurance could seem like the least of your worries at the time, the strain of any additional issue can feel as if it’s been amplified tenfold in the given context.
On the brighter side, however, such a major shift in life circumstance can be seen as an opportunity to seek fresh options and change things for the better. If there’s ever a significant increase in your auto insurance, you may want to scope out the market for a better rate.