Car Insurance and Major Life Events
Over the course of your life, you'll encounter major events that can impact your automobile insurance rates. When you're preparing for a major change or are currently going through one, it may be a good time revise your auto insurance policy.
Below are the most significant life changes that can affect your car insurance rates:
- Having children.
- Getting married.
- Purchasing a new home.
- Getting divorced or death of a spouse.
- Purchasing a new vehicle.
If you're relocating to a different city or state, you'll want to evaluate your automobile insurance.
Insurance in certain cities is more expensive because of the region's statistical risks (i.e. the likelihood of your car being damaged/stolen). If you're moving to a new state, you might find that the state has different laws about minimum insurance requirements. Your current insurance carrier may not even offer auto coverage in your new state of residence, so come up with a few back-up carriers just in case.
Statistically, parents who have young children are safer drivers because they tend to exercise more caution on the road. Because of this, insurance companies usually offer lower rates to people when they have babies. Having children may also mean you want to purchase a safer car and an excellent child safety restraint system. When you do these things, your auto insurance company will be inclined to lower your rates.
On the other hand, if your children are nearing the driving age, you should expect your rates to substantially increase when you add them to your insurance policy. Statistically, teen drivers have a much higher risk of being involved in an accident.
When you get married, you and your spouse may opt to place all of your vehicles on a joint insurance policy. When you take advantage of multiple-car discounts and bundle insurance deals, you'll say "I do!" to financial savings.
Additionally, car insurance companies consider married couples to be more responsible and take less risks than single individuals.
Purchasing a New Home
Purchasing a new home may affect your insurance rates. The home's location is often a factor. Are you in a safe and less-crowded neighborhood where your car's less likely to be damaged? Or are you in a busy urban area where there's a high likelihood your vehicle will eventually need repairs?
Where you park your car can also affect your rates. Do you have off-street parking where your car is safe in a garage? Or do you have to park on public streets?
Finally, if you choose to insure your home AND your vehicles on one policy, you may be able to get a multiple-line discount.
Getting Divorced or Losing a Spouse
When you get divorced or lose a spouse it's important to evaluate your auto insurance. These life-changing events could result in the loss of joint-policy and multiple-vehicle discounts. Make sure you to talk to your insurance agent about which discounts are available to you when you're single again.
Purchasing a New Vehicle
When you purchase a new car, it can have a large impact on your car insurance. Newer vehicles are often more expensive to insure.
If you're purchasing the vehicle with a loan, you'll likely be required to carry comprehensive and collision insurance in addition to liability insurance. You might also want to purchase gap insurance to cover the difference between your loan balance and the vehicle's worth in the event it's totaled in an accident.
Understanding how much you'll need to spend to insure a new car should be a major consideration before purchasing the vehicle.
When you retire, you may drive fewer miles, resulting in a decrease in the cost of your insurance; you might even decide you don't need a car anymore. Alternatively, you may end up driving more if you choose to travel with your new abundance of free time, which could increase your insurance rates.
Either way, be sure to speak with your car insurance carrier about any changes that could come to your policy's rates.