By: ALLISON HESS
You’ve made an exciting decision to move in with your partner. You’re eagerly picking out your coffee table and potted plants, and you cheerfully put the new key on your key ring. But there are some serious conversations you need to have with your partner aside from which laundry detergent you’ll use and if you want pets. Moving in with a significant other may change the way you're perceived by your insurance company.
How will moving in together impact your insurance? What do you need to know to make sure you and your partner are fully protected in the case of unexpected incidents?
Note: We are talking about unmarried couples. It changes slightly for married couples, although insurance companies are starting to make all partnership policies similar.
Homeowners’ insurance covers your home in the case of damage from fire, flood, theft, or natural disaster. It also includes liability protection in case someone is hurt on your property and sues you.
IF ONE PARTNER IS THE SOLE OWNER OF THE HOUSE…
The owner of the house will hold homeowners’ insurance. This will cover the structure of the house, liability, and the homeowners’ contents. Their homeowners’ insurance will usually not automatically cover the contents of anyone else living in the house, though.
If you own the house, there are two possibilities to ensure your partner’s belongings are covered as well:
Your partner can purchase a separate renters’ insurance policy to cover their own personal contents.
You can shop around to find an insurance company that will add a named insured to your policy, which would then cover your partner’s belongings under your homeowners’ contents coverage.
IF YOU JOINTLY OWN THE HOUSE…
A lot of insurance companies will write a joint homeowner's policy if you both own the home, even if you are unmarried. This is because they’re insuring the home and the owners of the home, which would be both partners, in this case. That means you would likely share the cost of the same homeowners’ policy.
Make sure you talk to a lawyer to determine how you will split the cost of the property and insurance premiums moving forward. Drawing up a partnership agreement at the time of purchasing helps avoid issues or arguments later on.
Renters’ insurance functions like homeowners insurance, but it covers anyone who is renting an apartment or home.
IF YOU ARE BOTH RENTING THE APARTMENT…
Renters’ insurance covers the property, not the owners. This makes it easy for partners (or even friends and roommates) to get a joint renters’ insurance policy. Some partners still opt for separate renters’ insurance, though, because it might be cheaper or less complicated. You may also want separate renters’ insurance in case one partner decides to move out for whatever reason.
IF ONE PERSON IS RENTING…
If only one person is paying rent for both partners, you can usually hold only one renters’ policy. Again, the insurance company is insuring the property and the contents within the property, not the owners themselves (unlike homeowners’ insurance). Typically, the renter can pay for insurance and list their partner’s contents on the renters’ policy.
Auto insurance protects from liability in the case of an accident. It also covers property damage and other incidents related to a collision, acts of God, or other concerns with your car.
IF YOU BOTH OWN SEPARATE CARS…
If you each own your own cars, you can get separate insurance policies without a problem. Some insurance companies will allow you to bundle and discount these policies if you both drive one another’s cars. But you’ll have to shop around, as a lot of insurance policies won’t put two separate cars and owners on the same policy.
IF ONE PERSON OWNS A CAR AND THE OTHER DRIVES IT…
The owner of the car should purchase auto insurance and notify the insurer that a domestic partner will be using the car. It’s smart to talk to the insurance company to list your partner as a second driver on the policy. Though this may increase your premium, you do not want to “forget” to list your partner as a secondary driver. If your insurer finds out, they could deny claims and ask you to back pay premium for a second driver.
IF YOU JOINTLY OWN A CAR…
You both own and share one car. You want to have one policy to cover the car and include both drivers. In most cases, one person will have to purchase the insurance and list the second person as an additional driver.
This might raise your premium slightly, but you want to make sure that both drivers are fully covered. If one partner gets into an accident but isn’t listed on the insurance, they won’t be covered—even if they are an owner of the car.
IF YOU JOINTLY OWN TWO OR MORE CARS…
If you own two or more cars together, it’s usually cheaper to get one policy that includes all cars. Married couples often do this to get discounts on insurance. Not all insurers will allow unmarried couples to bundle their cars together, but it’s becoming increasingly common for multi-car households of unmarried couples as well.
If all else fails, consider transferring ownership of all cars to one person. That person will then buy all insurance and list the other person as a secondary driver. This can be the cheapest way to handle insurance for multiple cars.
Umbrella insurance provides extra liability for home and auto. This is especially important for a partner to own if they are the “secondary member” on homeowners’ or auto insurance. Even if only one of you holds the insurance, someone can file a suit against both of you (both drivers or habitants of the home) in the case of an accident where one of you is found at-fault. Make sure your assets are fully protected with umbrella insurance.
The earlier you talk about these legal details with your partner, the easier it will be to solve any concerns as they come up. Incidents and accidents happen—and you want to be fully protected so you and your partner can weather the storm as a team.
Talk to an Emerson-Prew agent right now to start comparing policies that will cover you and your partner as you take this next step of your life together.
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