When Should Couples Have Separate Auto Insurance Policies?

When couples get married, they are usually in a rush to start combining their lives and sharing their assets. This is all good, but one thing you shouldn't rush into combining is your auto insurance policies. There is a common belief that bundling car insurance coverage leads to multicar discounts, but this isn't always the case. Here are a few cases when you are better off with separate policies:

One of You Has a Checkered Driving History

As hinted in the introduction, bundling car policies may lead to multicar discounts. However, this discount may not be enough to benefit your individual policy from the high rates occasioned by your partner's poor driving history.

Take an example where your partner has been convicted of a few diving under the influence (DUIs) cases in the recent past, and has even had their driving license suspended.  A DUI conviction is a red flag that can raise a driver's rate by an average of $800 for the first offense; meaning it can be higher, especially for subsequent offenses. Therefore, if insurers view your partner as a high risk driver, then you are better off keeping your policies separate.

One of You Has an Expensive Car

Speedy cars, sporty cars favored by youngsters, and high-end cars are some of the most expensive vehicles to insure. This is not just an insurance gimmick; each of them has a good reason for attractive high rates. For example, high-end (luxury) cars cost more to repair or replace, so their coverage must be high. If your partner has such a car, they can drive your premiums through the roof if they bundle their policy with yours; so separate policies may be ideal.

One of You Has a Poor Credit Rating

Lastly, you should also think about separate policies if one of you has a dismal credit score. Some states allow insurers to use credit scores as a factor in calculating auto coverage rates. Insurers have found that this score is a good indicator of how careful a driver is; drivers who have low scores are likely to be more careless than their high-scoring counterparts. Therefore, your partner's low-scores may raise your rates if you combine policies.

State laws will determine whether you can leave your partner's name out of your policy or if you must list them as a driver. Most states or insurers require all members (with driving licenses) of a household must be listed on all cars because of the assumption that all of them will be driving the cars. However, you can minimize your rates by naming the high-risk driver on the cheap-to-insure car and the low-risk driver on the other car. Talk to your insurance agent for more tips on managing your auto insurance rates after tying the knot.