How does getting married affect your insurance?
My daughter Megan got married this past weekend. It was a beautiful ceremony and lifelong memories were made. So now that they are married, how does that affect their insurance plans?
1. Renter’s Insurance
Megan and her new husband Alex need to make sure that they are both listed on their Renter’s Insurance. Since they live together and are now acquiring “stuff” together, they want to make sure that in the event of a fire or break-in, that their possessions are covered. More importantly, they want to make sure that their liability is covered- because they have now combined assets and therefore can now be sued together. If Alex is grilling and accidentally lights the side of the apartment complex on fire- their landlord’s insurance company is going to sue them both for damages- and renter’s insurance (as does homeowners insurance) includes a nice personal / family liability coverage that starts at a minimum of $100,000 for things of this nature.
2. Jewelry Endorsement
Megan had already scheduled her engagement ring on her Renter’s policy- but now, they should look at adding their wedding rings. On most renters and homeowners insurance policies, jewelry is only covered for theft up to a per-item limit of $1,000. It is also not covered for “mysterious disappearance”. When a person gets married, we recommend looking over the jewelry coverage on their policy to make sure that they have a high enough limits. And if they want their ring to be covered for mysterious disappearance or loss (up to the value it is appraised for)- scheduling the ring is a must.
3. Life Insurance
A new marriage is a fantastic time to review life insurance. For life insurance that is already in place (either privately owned or through an employer), now is the time to put your new spouse on the policy for the direct beneficiary. This also applies for any retirement accounts that are in place as well. I have heard too many horror stories of life insurance or retirement account money going to an ex-spouse or ex-boyfriend/girlfriend because the beneficiary form was not updated. There is nothing an insurance company can do if that mistake occurs.
It is also a good time to purchase life insurance. You and your new spouse are building a life together and now that you are married, assets and debts are now combined. If your spouse dies unexpectedly, you may be on the hook for the remaining bills (not to mention funeral costs).
Life insurance only goes up in price. You get older. You get less healthy. You may pick up unhealthy or risky habits (ie- start smoking, start scuba or sky diving). You may acquire a motor-vehicle record that is the same length as my 3rd grade Christmas list. These are all things that make your life insurance rate go up. When you lock in your rate as a young person- you not only make sure you are covered, but you can work that nominal price into your budget.
4. Auto Insurance
So whose auto insurance does the new spouse go on? It depends. In my daughter’s case, it would be better for her to stay with her current carrier for the time being because she has had a couple car accidents in the past couple years. It would be less costly if she stayed put and her husband Alex stays on his policy separately. However, the insurance company is going to want to make sure that all drivers in the house have insurance, so Alex will still list Megan as a driver in the household but also as having her own insurance (and Megan will have to prove that she has insurance elsewhere). However, there is normally a discount for being married, so Alex’s rate will go down a little bit.
In circumstances where there is no driving history to guide which auto insurance plan to go on (or to stay separate), it helps to look at the policies themselves. One spouse may think they have a cheap plan- but in actuality- they are paying lower rates because they have an insurance plan that doesn’t cover anything. Now that you are married, remember- your assets are combined, so if you get into an accident where you are at fault and don’t have liability insurance that will cover the judgement- both of you can be on the hook! This is a good time to review your auto policies to make sure that both of you are covered in an accident (especially your liability). Call a good insurance agent for a review.
Getting married is a very exciting time in someone’s life. Making sure that the newlyweds insurance needs are addressed promptly can save a lot of headaches (and money) in the future.
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