Uniting in holy matrimony certainly has its advantages, among them being the cost of married car insurance vs. single car insurance. And while mere economics is not necessarily the best of reasons to get married, any financial benefits couples can gain from this relationship is a plus. But why do married couples pay less for car insurance? Is it justified?
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In order for car insurance companies to determine how much to charge individual customers for their policies, many different factors must be taken into consideration. Some of these factors include the make and model of the car, how often it’s driven, what state it’s registered in, and how much coverage the owner desires. But more important than all those factors is the history and potential risk of any drivers operating the car.
As far as car insurance companies go, risk is defined as the potential of any given driver to be the source of a claim against it; either through his own actions or those of another person. In other words, the insurer must ask himself how likely it is he will end up paying a claim that is greater than the premiums a driver paid in. It is this risk-to-reward ratio that has the most influence on individual car insurance prices.
Right off the bat, a brand-new or young driver is assigned to a risk pool based on his age and lack of driving experience. One who drives safely for the first few years, with no accidents or violations, is likely to be moved to a lower risk pool around the age of 21. On the other hand, the opposite is also true. The more accidents and violations one is guilty of, the higher the risk potential will be. And that means he or she will pay more for insurance.
Safety Comparisons: Married Divers vs. Single Drivers
In terms of married car insurance vs. single car insurance, married couples have a decided advantage when it comes to cost. Like it or not, the general perception among insurance providers is that married couples are more stable in all areas of their life and, therefore, tend to be safer drivers. Although extensive research is not completely conclusive on the question, statistics tend to suggest this line of thinking is mostly correct.
Between men and women, men will see the greatest difference in insurance premiums once they get married. This is primarily due to the fact that young male drivers between the ages of 18 and 21 are considered the highest-risk drivers on the road. Even at 21, when insurance rates begin to drop, they still are considered a higher risk until roughly age 35. But getting married in their early to mid-20s will quickly reduce their perceived risk and lower their car insurance costs.
Factors Other than Safety
There are some other things insurance companies consider with the cost of married car insurance vs. single car insurance. One of those things is the likelihood that married couples will need other insurance products that can be bundled together. For instance, married couples are more likely to purchase a home, carry life insurance, and eventually acquire consumer goods that will also need to be insured.
Insurance companies bank on the fact that if they take good care of their auto policy customers who are married, those customers will be more willing to purchase the rest of their insurance products from them. Part of taking care of them is keeping the cost of their car insurance as affordable as possible. Along these lines, most insurance companies provide additional discounts to married couples who bundle all their insurance needs.
One additional factor to consider is that of financial stability. While this principle is not as concrete as it once was, it’s still perceived among insurance companies that married couples are more financially stable. They tend to be dual-income households, more likely to pay their bills on time, and less likely to acquire large amounts of debt outside of mortgages and car loans. Financial stability means a lot to an insurance company because car insurance is easy to put on the bottom of the list during times of financial trouble.
Overall, the cost of married car insurance vs. single car insurance most definitely favors married couples. As previously stated, financial gains are certainly not a good enough reason to tie the knot, but they are one of those fringe benefits that make doing so all that much more profitable. If you’re still single check with your insurance company to find out how marriage would affect your rates. You might be surprised!
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