Once married, one of the most important things to do is to reevaluate insurance needs. Insurance for newlyweds is not the most exciting thing to do after a honeymoon, but it is a smart use of time and energy that can save money in the long-term.
Car insurance, life insurance and homeowners insurance are just some of the policies it’s a good idea to evaluate after tying the knot.
Combining cars under one auto policy can eliminate one of the biggest gaps for couples: inconsistent liability limits. For example, the husband-to-be might carry $100,000 worth of coverage for injuries caused by him in a car accident. The wife-to-be might carry $300,000 in coverage. When they ride together in her car, they have $300,000 worth of protection, but lose $200,000 in coverage when they ride in his car. Consistent liability limits are an important part of any good insurance plan.
First, it’s a good idea to ensure that any auto insurance policy names both spouses on the policy’s coverage page. Even after marriage, a spouse who is not named can lose some coverage under certain circumstances.
Before choosing a policy, it’s wise to get quotes from both existing providers (and possibly even consider a new provider). Look at the average cost of premiums as well as available discounts. One provider may appear cheaper but isn’t after savings are calculated. These are some of the providers that currently have a good reputation for providing a good value overall.
Home insurance for married couples is usually cheaper because providers consider married couples to be statistically safer to insure than singles. However, before committing to an insurance provider, keep in mind that providers aren’t all created equally. Get an idea of the average costs for home insurance, shop around with some of these top providers and speak with a licensed insurance professional before purchasing a policy.
If either spouse already owns a home, the other spouse should be added to the existing policy. While the policy will typically cover both of you automatically should something happen, it’s still wise to get both names on the policy as soon as possible, just in case. If both spouses own a home and plan on keeping them, it’s a good idea to add each other’s names to both policies.
Newly married couples who rent instead of own should consider increasing the liability limit. Most renters insurance automatically comes with $100,000 in liability coverage, but raising it to $500,000 is very economical and typically only costs about $20 a year. Renters insurance may also cover theft of any wedding gifts at the reception, but it is important to remember to buy extra insurance for valuables, such as the engagement ring. Renters insurance excludes or limits coverage on most valuable property.
As with every type of insurance, it’s important to let the insurance provider know about the marriage. Renters insurance for married couples is pretty automatic because of how the policies are written, but the company usually needs to know about the marriage.
Life insurance after marriage provides important protection for couples and parents with kids. Not only can it help pay for funeral expenses, but the death benefit can provide a much-needed cushion should a spouse die unexpectedly. A common misconception is that only the main breadwinner needs to purchase coverage, but it’s a good idea to consider covering both spouses to maximize the financial benefits of life insurance.
There are two types of life insurance that you’ll want to consider— term life and whole life, both of which have advantages and drawbacks. Term life is cheaper but only provides coverage until a certain age, after which spouses or beneficiaries won’t receive any death benefits. Whole life is more expensive, but guarantees beneficiaries will receive money the insured dies. It also provides a savings vehicle that can be borrowed from during the life of the policy. It’s a good idea to do a little research about how to select the best life insurance policy and speak with a licensed insurance professional before purchasing.
Another type of insurance newlyweds should consider is an umbrella policy, which effectively extends liability coverage with auto, homeowners or renters insurance.
Umbrella policies have three advantages:
- Extra liability coverage when a major lawsuit exceeds auto, homeowners and renters insurance limits
- Coverage for defense costs in lawsuits
- Coverage for legal issues that car, homeowners or renters insurance policies. An example would be if the groom rents a boat on the honeymoon and injures someone with it.
Umbrella policies are sold in million-dollar increments that typically cost about $200 a year.
Other considerations for newlyweds and insurance
As newlyweds, it’s always a good idea to review any insurance policy either spouse carries, especially health and disability insurance policies.
If both already have health insurance through their employers, there’s usually no reason to change anything unless one spouse has better coverage options than the other.
Disability insurance is important, too, because one spouse may be unable to work for an extended period before retirement. Having health insurance isn’t enough in these situations because health insurance only covers medical costs. Disability insurance will help with daily living expenses, too, should something happen.
For these policies and any other insurance carried by either spouse, speak with a licensed insurance professional to learn more about the available options for combining or changing coverage once married.
Frequently asked questions
How much should we expect to pay for car insurance?
Car insurance rates are dependent on several factors, such as location, age, driving record, credit score. It’s a good idea to do a little research on premiums in your state, then shop around for the best providers and speak with a licensed insurance professional before purchasing.
Do married couples pay less for car insurance?
Yes, car insurance for married couples is typically less because insurance providers know that married couples typically share driving responsibilities. Certain situations where it may not help much (if any) are if one spouse has a bad driving record or credit score or drives an expensive vehicle to insure.
How do we find the best home insurance?
Homeowners insurance is not one-size-fits-all, and finding the best provider depends on your unique needs. It’s a good idea to shop around and compare what each insurance provider offers, then speak with a licensed insurance professional before purchasing.