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Purchasing a joint car insurance policy with your partner—or adding them to your current policy—can help streamline your finances. It could even save you money and make the whole process easier.
In some cases, however, it might be better to keep your auto insurance separate. Here's what you should consider before you add a partner to your policy.
How Joint Car Insurance Works
Getting a joint car insurance policy is a simple process. Whether you're married or unmarried, you'll simply add your partner to your policy as a driver or purchase a new policy with both of you as listed drivers. The billing process will also be the same, although you may wish to speak with your partner about how to split the bill.
If you live together, you may be required by your insurance company to list your partner on your policy. If they don't plan to drive your vehicle, you can list them as an excluded driver. And if you each own a vehicle separately under your own names, you can still get a policy together and list each other as excluded drivers for the vehicle the other partner owns and drives.
As an excluded driver on their vehicle, you won't be covered if you get in an accident while operating the car, even if you only use it occasionally or in the event of an emergency.
At the same time, you'll still benefit from having a multi-vehicle policy, which can save you money. A multi-vehicle discount could save you between 10% and 25%, depending on the insurance carrier.
Benefits of Getting Joint Car Insurance With Your Partner
There are several reasons to consider adding a partner to your auto insurance policy, even if you're not married:
- You could save money. Depending on the insurance carrier and the cost of your policy, you could save hundreds of dollars every year just by adding your partner and their vehicle to your existing policy or by purchasing a new joint policy.
- It could make it easier to manage bills. With one policy, you only have to worry about one recurring payment instead of two. Of course, if you're still splitting bills, you'll need to arrange that after the bill hits one partner's account. Even so, it can still help streamline your money management.
- It makes it easier to manage the policy. With one policy between the two of you, you only have to worry about one set of insurance documents. What's more, if you need to make adjustments to your auto insurance coverage, you only need to do it with one policy instead of two.
Drawbacks of Getting Joint Car Insurance With Your Partner
Although there are some clear benefits to adding your partner to your auto insurance policy, there are also some potential problems that could make matters worse rather than better:
- Your partner may have a negative driving or claims history. Unlike a cosigned loan, where a creditworthy cosigner can help reduce the cost of the loan for the primary borrower, that doesn't work for auto insurance. If your partner has a negative driving history or a track record of filing multiple claims, their coverage may cost far more than yours—and the discount you get from combining your coverage may not be enough to make up for it.
- Your partner may have a bad credit history. Even if their driving record is stellar, if your partner has a poor credit history, it could end up hurting your chances of getting an inexpensive policy. Insurers don't consider credit as a factor in every state, so this may not be an issue depending on where you live.
The same goes for other factors that go into determining auto insurance rates. If your partner drives an expensive vehicle, has a long commute or doesn't have any safety features in their vehicle, it could end up costing you more than it would save you to combine your auto insurance policies into one.
Look for Other Opportunities to Save on Your Vehicles
Auto insurance can be expensive, but in the right scenario, pairing up with your partner on a policy could save you money and make your life easier.
Before you go down that path, though, carefully consider whether adding your partner would ultimately cost you more than it would to leave them separate.
In addition to your auto insurance, it's important to look at other opportunities to save money with your cars. For example, working to improve your credit could help you save money the next time you buy a car and need an auto loan to help you pay for it. Additionally, if your credit has improved enough since you purchased your existing vehicle, you may be able to refinance your auto loan with better terms.
If your partner has great credit, you may even ask them to cosign the loan to give you a better chance of securing a low interest rate. You both can check your credit for free with Experian to see where you stand.