Car insurance for couples, the married and spouses does not mean only big discounts. It requires also attention to some niceties. Have you and your spouse ever gone to a car lot to buy a car and end up with a car insurance policy only showing one of your names? This might be nothing more than semantics, or it might be something that will cause problems later. How can you tell the difference?
Marriage can have a positive impact on your auto insurance premium. But there are also some things to be aware of
An example of a policy that could potentially create an issue is if the car dealership decided to put the car in only one name rather than both, perhaps because of a credit issue or debt to credit ratio of one of the spouses. If the finance dealer is quickly dealing with the paperwork and helping you establish insurance, he or she may in haste leave off the name of the other spouse from the main insurance paperwork.
Because the couple is legally married, they are also legally responsible for each other. Additionally, insurance companies require that all household members who are of driving age be indicated on the auto policy and either rated or excluded depending on the state insurance statutes.
Most agents who are working directly with you or with the car finance person will understand the need to not only specify who’s name will be showing on the
title or loan of the car, but also any spousal information and any other driver information.
Even if the car is entirely financed in one of the spouses’ names, the agent who is creating the policy can include the name of the other spouse on the declarations showing them as equal partners and both financially responsible for the vehicle. It makes it much simpler if one of the spouses is required to pull out proof of insurance during a traffic stop or checkpoint to prove ownership of the car.
However, all is not lost if one spouse is not showing on the ID cards specifically. As long as the proof that is provided shows the name of the person who also is showing as registered owner of the vehicle, there should be no issues with you driving the car as long as you have valid driver’s license.
Where it is most critical to have all names appear on the declarations and ID cards is if the title or car loan will specifically name the individuals. In this case, it does not matter what the relationship is between the co-owners, if they are both showing on the loan or on the title, they must both show up on the ID cards and policy as “Named Insured’s” and on the declarations as owner.
If you are buying a vehicle and someone else besides yourself will be responsible for the car loan and liability of the vehicle, you should always be sure that the agent who is setting up the policy understands this and ask them
to ensure that both names show up on the declarations as “co-owners” and also show up on the ID cards with both names. Sometimes it requires a little extra manipulation of the agent’s software system to ensure that names show up properly, but by specifying this important information up front, you won’t end up with an incorrect policy that needs to be rewritten later.
You will want to understand the implications of being a co-owner or co-signer of a car and car loan. Do not co-sign for someone who you do not trust implicitly. It’s a dangerous financial risk in several ways:
- If the other person defaults on the loan, you are on the hook.
- If the other person causes a fatal or very bad accident and doesn’t have enough insurance for him or herself, the other party can sue you.
- You could be found liable for other injuries or damage the other co-owner causes even if you weren’t’ in the car at the time of the incident.
Co-owning and co-insuring a car can be tricky so be sure to thoroughly investigate all your options before signing a legal document.
Last but not least you should be aware of possible coverage issues in the incident that the partner, not explicitly named on the policy leaves the household. A spouse will enjoy the same coverage as the policy holder only as long as she is resident of the very same household. Periods of longer separation to whatever reasons could cause troubles. Not only in auto insurance, but virtually all policies.
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