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After getting married, it’s important to report this life update to your insurer. Here’s why tying the knot matters to a car insurance company.
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Getting married changes some obvious aspects of a couple’s financial life. Obviously, two people have now formed a legal union, so they may have a joint checking account, live in a shared household and split expenses, and be working toward financial goals together.
But aside from the obvious financial implications of getting married, it’s also important to take one other surprising step that many people don’t realize. It’s a step that can result in ongoing financial savings, so it is absolutely worth taking.
Do this after marriage to reduce costs
After getting married, both of the newlyweds should report their change in relationship status to their auto insurer.
Now, a car insurance company may not be first on the list of those who a couple wants to share their exciting news with (for normal people, their insurer probably isn’t even on the list of those who are notified). But the reality is, it is worth a phone call to report that a marriage has taken place.
That’s because auto insurance companies take many factors into account when setting insurance premiums — and marital status is one of them.
A new marriage could mean lower car insurance premiums
Car insurance companies have tons of data on what makes drivers more or less likely to become involved in collisions. And one of the things the data shows is that married people are often less likely to become involved in auto accidents that result in insurance claims.
Because insurers view married people as presenting a reduced risk of making claims that lead to payouts, those who are married rather than single end up generally paying a lower rate for car insurance coverage.
In fact, premiums can be as much as 5% to 6% lower for married people buying full-coverage auto insurance, compared to singles buying the same policy. A full-coverage policy includes liability, collision, and comprehensive coverage to pay for losses to a policyholder’s own vehicle and damage caused to others, and it’s often the right choice for drivers.
A savings of 5% to 6% on auto insurance can provide significant savings. For a driver who was paying around $1,800 a year to cover their car, a 6% reduction in premiums would leave that motorist with $108 extra in their pocket instead of the insurer’s — enough to take their new spouse out for a nice dinner.
Multi-car policies can also be a source of savings
Married couples may also be able to benefit from additional premium price reductions by getting together and buying their coverage from the same insurer to qualify for multi-car or loyalty discounts. So, the savings could be even greater if a newlywed couple informs their insurers of their new relationship status and if the couple compares their options among different insurers than what they came into the relationship with to see which will offer the best rate for them under their current circumstances.
Those who want to benefit from this savings should reach out to their insurance agent or call the insurance company directly ASAP so their data can be updated with the insurer and their policy premiums can be set appropriately to their new risk tolerance upon renewal of the policy. Since marriage often comes with lots of new shared goals, saving money on insurance premiums together could help make accomplishing those objectives easier — so it’s worth the effort.
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