The next time you size up a potential date, ask yourself: Is this person going to break my car insurance? There's an appropriate level of car insurance for every stage of a relationship. In some cases you'll change things to protect your new love interest. In others, your insurance company will insist. Make sure your policy matches up to your level of commitment. Our simple guide:
Shopping around for a soul mateYou may think handing your car keys to your date to drive you home is no big deal, but it really is - you're handing him or her your policy. You have vicarious liability for anyone you let operate your vehicle. And, since car insurance follows the car, not the driver, it'll be your policy that pays the bills first in an accident. Before letting anyone even get behind the wheel of your car, make sure your policy covers “permissive drivers.” Most do, but the cheap ones might not. If it doesn't, your plus one won't be covered to drive even a couple of blocks in your car. It's wise to also double-check that coverages aren't lowered for permissive users. Some “step-down” policies will cover other drivers, but only with state minimum coverage, even if you have purchased more for yourself. And who's liable if damages exceed the minimum and your new friend doesn't have enough insurance to cover the difference? You are.
You're a coupleThis is a bigger commitment than you think. Allowing someone else the frequent use of your vehicle means that person needs to be added to your policy as an “occasional driver.” There may be an additional cost to you. But it means you avoid any step-down provisions that limit coverage after an accident. Moving in together: Both you and your partner need to inform your car insurance companies of the move and new roommate. The address change could affect your rates (for better or worse, depending upon the ZIP code you moved to). It's also likely you'll be required to add each other to the other's policy as a “listed driver.” Your new roomie's driving record could hurt your premiums. You should ask about it first -- really. You don't want to wait for the first renewal statement to find out about a DUI that is going to increase your bill. On the other hand, a flawless driving record could actually lower your rates.
Normally, you can't combine policies yet and save with a multi-car policy because you don't have an insurable interest in each other's car. And insurers may require that you be related - married - before issuing a single policy to you as a couple.But no pressure or anything. Breaking up: If wedding bells weren't in your future after all, you'll need to inform your car insurance provider about any change in address. You'll need to take your former sweetheart from your policy. Hopefully you're still on speaking terms, because most auto insurers will require you to show proof that the person moved and/or has his or her own car insurance policy. Without this, it can be difficult to remove a driver.
Just married!Congratulations : You're now a “named insured” - you both have the power to make changes to your policy. A named driver is entitled to all the benefits of the policy. For example, if you borrow or rent a car, your status as a named insured means the liability coverage follows you. The changes that come with getting married make it a great time to shop around for a policy that meets your combined needs. Most insurance companies have a big fat car insurance discount for you. Several, in fact:
- Married people tend to make fewer claims; data gathered for us by Quadrant Information Services showed an average discount for married drivers of about 11 percent nationwide.
- Married people tend to buy homes. That Quadrant data showed an average multi-policy discount for homeowners of about 8 percent nationwide.
- Married people tend to own more cars. A multi-car discount is typically 10 to 25 percent off collision, comprehensive and liability rates.
Try, try againDivorce is complicated; insurance can get messy, too. First, inform your car insurance company of the pending divorce. Car insurance companies' rules vary, but it may be possible to keep a single policy for you and your ex until car ownership has been divided, even if you are living apart.
If your insurer doesn't allow this (and you each end up with separate policies), it's vital that any car your name is attached to remains continuously insured, even if your soon-to-be ex has the car in his or her possession. If there is a lapse in coverage, you can be held accountable and receive penalties from the state.Once the vehicles are legally divided up, and the divorce is final, drop your ex-spouse as a driver and reassess what you need on your car insurance policy. Unfortunately, your rates may rise due to your new single status. Better luck next time. Penny Gusner is a consumer analyst for CarInsurance.com.