Your financial life can change significantly when you get married. You might save money by splitting household expenses and filing taxes jointly. What’s more, your marital status can influence how much you pay for car insurance.
When auto insurance underwriters calculate your car insurance premiums, they don’t solely look at your driving history, car model, and where you live. You might also be asked about your marital status — you can even save money on your car insurance by being married vs. single.
Car insurance rates for married and unmarried drivers
According to a research report from the Consumer Federation of America, married car insurance policyholders tend to have lower insurance premiums than their single counterparts. While differences in premium costs varied among insurers, some single policyholders were found to be paying up to 34% more than married drivers.
One reason for the rate differences may be that married people are perceived as more responsible drivers – although the study also alludes to income differences between married couples and single individuals as playing a role.
The Insurance Information Institute states that insurers have long used factors outside of a motorist’s driving record – such as age, credit history, and marital status – as determinants in setting car insurance rates because such rating factors have been proven to predict the likelihood of the policyholder filing auto insurance claims.
Because an insurance company’s business relies on collecting more money in premiums than it pays out for claims, your insurer will probably charge you higher rates if it perceives you as more likely to file costly claims. Likewise, you can score a lower rate if your insurance company views you as less likely to file claims.
It’s important to know that if you live in a state that has banned insurance companies from using marital status in setting insurance rates – such as Massachusetts and Michigan – your car insurance cost will not be specifically impacted by whether you’re married or single. But there are other ways in which your marital status can indirectly affect your insurance premiums.
Benefits of being married when purchasing auto insurance
The fact that married couples are viewed as less risky to insure is not the only reason they tend to benefit from lower premiums compared to their single counterparts. Married couples often benefit from other car insurance discounts that don’t apply as often for single people.
Many major car insurance companies – such as Allstate, Geico, Liberty Mutual, Nationwide, State Farm, and USAA – offer multi-car or multi-policy discounts. Essentially, they reward customers for having more than one vehicle under their coverage or for purchasing homeowners’ insurance, life insurance, or another insurance policy in addition to their auto insurance.
Statistically, married couples have a higher probability of owning more than one car, being homeowners, and having life insurance compared to single individuals.
Married people also tend to have higher credit scores than single people. Auto insurance companies often analyze credit status when determining car insurance rates, because studies have shown that people with excellent credit tend to file fewer claims than those with poor credit.
So while there may not be a specific “marriage discount” for car insurance, married couples tend to benefit from lower rates in indirect ways.
Disadvantages for married couples on the same policy
While there are clear benefits to being married vs. single when it comes to auto insurance rates, there can be some disadvantages for couples who plan to be on the same policy.
If your partner has a poor driving record with a history of claims, it could increase the cost of your auto insurance even if you have a good driving record. Also, if your spouse has poor credit, insurance providers may deem you as more risky to insure and saddle you with higher insurance premiums.
If your partner’s driving history or credit is likely to increase your premium, you might consider maintaining separate policies – either with the same insurance company or different companies. Get car insurance quotes from multiple providers to compare the costs of keeping your policies together or separate.
Your insurance company may require that you list your spouse on your policy – assuming you share a household and are both licensed drivers. However, you can request a named-driver exclusion if you don’t want your spouse included on your policy. Just know that if your spouse drives your vehicle and gets in an accident after being excluded from your policy, your insurance company won’t cover any claims.
How do car insurance benefits apply to unmarried couples?
If you’re not married but living with your significant other, you might be able to take advantage of some of the benefits that married couples enjoy.
Unmarried, cohabitating couples who share a car (or multiple vehicles) can get a joint insurance policy and pursue multi-vehicle discounts or discounts from bundling their car insurance with other policies.
If you live together but each have your own car and separate auto insurance policies, you’ll likely need to list your significant other as an occasional driver on your policy. Listed drivers won’t have a positive or negative effect on your insurance rate – similar to if you and a platonic roommate lived together but owned separate vehicles.
If you name your partner as an excluded driver on your car insurance policy, they would not be able to legally drive your car.
Insurance considerations for single drivers
Even though married couples tend to pay less for car insurance, you’re not going to get hitched just for the car insurance savings. There are other ways single people can lower their car insurance costs.
1. Evaluate your coverage needs.
Although your state may require you to carry a certain amount of liability insurance, other types of coverage – such as collision insurance, comprehensive insurance, and full coverage – are optional. You may decide you don’t need as much insurance coverage on your vehicle, especially if it’s a paid-off, older vehicle and you have savings to cover repairs out-of-pocket.
2. Adjust your deductible.
Most car insurance companies will allow you to opt for a higher deductible – the amount of money you’ll pay out-of-pocket after a car accident before insurance kicks in – in exchange for lower premiums. While this can help you save money overall, you must be prepared to pay that increased amount if you get into an accident.
3. Improve your credit.
Car insurance companies use a credit-based insurance score to help determine auto insurance rates (unless you live in a state that has outlawed the use of credit in underwriting). While this credit-based insurance score is not the same as your typical credit score, taking action to pay bills on time, settle delinquent accounts and lower your overall debt, can improve your standing in insurers’ eyes.
4. Maintain an excellent driving record.
The more time that passes where you don’t get into any car accidents, receive speeding tickets or file car insurance claims, the better your driving history will be.
5. Ask for discounts.
In addition to discounts for being an excellent driver, most major car insurers offer discounts for things such as bundling policies, serving in the military, getting good grades (if you’re a student driver), paying your premium annually instead of monthly, enrolling in auto pay and even opting for paperless billing. Check with your insurance company to see what discounts apply to you.
6. Shop around for cheaper insurance.
It doesn’t always benefit you to stay loyal to your insurance company – especially when there could be other companies out there offering lower rates. Shop around or contact an insurance agent to help you find the best car insurance for your situation.
