Just Got Engaged? – What you need to consider when combining your insurance coverages.
If you or your significant other picked Valentine’s Day to pop the question, there’s plenty of work ahead to plan your life together. Among the wedding plans and post-wedding plans, don’t forget to talk about the insurance implications of combining your households. From your car insurance to your health insurance, getting married can affect all of your coverages. To help understand these changes, the Delaware Department of Insurance (“DOI”) offers these tips to help soon-to-be-wed couples.
Homeowners and Renter’s Insurance
For some couples, one of the first decisions to make is where to live – whether to stay in one of your current residences or find a new home together. Either way, you’re going to have to decide if you’ll stay with one of your current insurance companies, or find a new one. There are several things to consider:
- Compare the premiums. Remember, location, size and construction type are considered when calculating your insurance premium. Essentially, if one home is larger or in a different area, the insurance may be significantly different.
- Premium rates on a home that’s been insured for a long period may have more discounts (e.g. claim-free or multi-line). Check your current policies for these types of discounts.
- Whether or not you’re moving, get quotes from both of your insurance companies and from other insurance companies, but make sure the quotes are for the same coverages so you’re making a fair comparison.
- Make an inventory of all of your belongings you’ll be combining to determine how much coverage you’ll need. Be sure to update your inventory as you purchase new items, or with wedding gifts. You can obtain an easy to use home inventory checklist from the DOI website
- If you or your partner has valuable artwork, collectibles, or jewelry – you may need a personal property rider on your policy to provide adequate protection against theft, accident or natural disaster.
- If you’re choosing to add on to a current home to accommodate an expanding family, call your agent. Always review your insurance coverage after any home improvement projects over $5,000.
- If you’re adding outdoor play equipment like a swing set, trampoline or swimming pool, you might consider an umbrella policy to increase your liability coverage – which protects you in the event someone is injured. The umbrella policy also provides higher limits of liability for your automobiles.
Cancelling a Policy
If you decide to cancel one or both of your current homeowners or renter’s policies, cancel your coverage effective the first day you’re no longer physically living in the home. That way if you’re moving out in stages, your insurance continues for any possessions you leave there. If you’re selling a home with a mortgage, your lien holder may require you to maintain insurance coverage until the home is sold. Check with your mortgage company for its requirements.
Most insurance companies will require you to submit a cancellation request in writing. Check your policy or talk with your agent to see how much notice you are required to give the company and where to send the request.
Leaving a home vacant while you’re moving can change your insurance risk. Vacant homes can be targets for vandalism or break-ins and there’s a higher risk for unforeseen damage (e.g. burst water pipes, fire). Insurers can impose coverage limitations once a home is vacant for a certain number of days. Check with your agent if you will be leaving a house vacant for an extended time, because you might be able to purchase a supplemental endorsement that provides coverage while the home is vacant.
Auto Insurance
With auto insurance, married couples have the option of combining their insurance policies. However, if you decide to combine your coverage, be aware that all licensed drivers in your household are then generally used to rate all of the vehicles covered. Here are some things to consider when combining your policies:
- If your spouse has a poor driving record, this could adversely affect your premiums. Consult with your agent about options like a named driver exclusion if you are worried about combining your policies.
- Your vehicle age and type affect your premium. Purchasing a larger vehicle to accommodate a growing family, such as a mini-van or sport utility vehicle, could impact your premium.
- If you will be transporting other children, you may want to consider increasing your liability or medical limits in case of an accident.
Newlyweds may find they are eligible for new discounts. Some insurance companies consider married couples a lower risk and may lower your rates. In addition, if you combine your auto policies or add auto coverage with the same company as your homeowners or renter’s policies, you may be eligible for additional volume or multi-line discounts.
If you or your spouse own motorcycles, boats, personal watercraft, recreational or other types of vehicles, be sure to contact your insurance company to see if both of your names are required to be added to the insurance policy. You should know that If all drivers of a vehicle complete an approved defensive driving course, you receive 10 percent off the PIP and liability portions of your auto insurance for three years. If you take a refresher course within 90 days of the end of the three-year period, you receive a 15 percent discount. Go to the DOI’s Defensive Driving web site for a listing of approved course providers.
You should also be aware of the fact that under Delaware law, when you initially purchase an automobile insurance policy, your credit rating can be considered by an insurer in determining your rates. However, not all auto insurers use credit scoring in their underwriting. Talk to your agent to find out if your carrier does or does not consider credit scoring. You may wish to shop around.
Health Insurance
When deciding what to do about your health insurance, start by evaluating your current and future health care needs. Review the provisions of the policies you are choosing between with those needs in mind. Remember to check for any policy exclusions or other limitations on pre-existing medical conditions.
If you have group health insurance, you are allowed to add your spouse to the plan outside annual open enrollment because marriage is considered a qualifying major life event. Contact your benefits administrator to find out what you need to do. However, be aware – some insurance companies require formal notification of marriage within a certain number of days.
If you have an individual health insurance plan, some insurance companies may require proof of insurability before covering your new spouse. This means they may be required to meet underwriting guidelines before getting coverage. Contact your insurance agent for specific enrollment requirements for spouses.
Life Insurance
A life change – like marriage – can be a good time to consider life insurance. It’s never easy to talk about these things during such a happy time, but life insurance helps secure your family’s financial future. It also helps ensure that your estate will be allocated to the beneficiaries you have chosen.
When evaluating an individual life insurance plan, you’re looking for one that fits your financial situation. For more information about your life insurance options, visit the National Association of Insurance Commissioners (“NAIC”) website at InsureUonline.org.
If you already have life insurance, you’ll probably need to update your beneficiary information to include your spouse. Contact your insurance agent or company for the necessary forms. If you have questions about choosing a beneficiary, consult with an estate attorney. Or, if this isn’t your first marriage, you may need to consult an attorney to see if there are any legal restrictions to changing your beneficiary information.
Blended Families and Health Insurance
If your newly combined household includes children and you need to provide insurance coverage for them, review your options. If you have group health insurance through your employer, you can add new dependents to the policy outside of the annual open enrollment period. Contact your employer’s benefit administrator for the specific requirements and enrollment forms.
If you have an individual health insurance plan, proof of insurability may be required to add the child(ren) to your policy. Make sure to review any limitations of coverage for pre-existing conditions before enrolling your child(ren). You will need Social Security numbers to add dependents to your individual or group health insurance coverage. And be aware that the insurance company may require you to provide documentation proving the relationship between you and the child before providing coverage.
More Information
For more information about auto, home, life and health insurance options, as well as tips for choosing the coverage that is right for you and your family, call the DOI Consumer Services hotline at (800) 282-8611.
