Monthly Archives: April 2017

Should Newlyweds Combine Car Insurance Policies?

Chances are, car insurance wasn’t the first thing you thought of after the proposal. In fact, you might not have thought about how marriage might affect your car insurance rates at all. But after the decorations have been cleared and honeymoon adventures logged, you’ll want to consider adding “check on combining car insurance policies” to your newlywed to-do list. Car insurance is usually cheaper for married couples — with a few important caveats.

No Matter What, You’ll Likely Save
Even if you do absolutely nothing, the sheer fact of being married is likely to have a positive impact on your rates once your policy is up for review. The Zebra, a car insurance comparison engine and digital auto insurance agency, projects a premium savings of 10-12 percent when all other factors remain the same.

Why is this the case? According to Frankie Kuo, an auto insurance specialist at Value Penguin, “Insurers find married people less likely to file a claim compared to single drivers of comparable profile, and so consider them less risky to insure.”

When Combining Policies Makes Sense
To nab an even steeper discount, consider combining your car and your beloved’s in a single policy. This makes the most sense if you both have spotless driving records and no recent gaps in insurance coverage, Esurance explains.

Remember, too, that in addition to lower rates, having two cars on the same policy can often earn you multi-car discounts from insurers. Moreover, even if your household only has one vehicle, you can still earn discounts for sharing a policy.

“Even if a family only has one car, we would still recommend a single policy that would cover both drivers, since it ensures that both drivers are insured without incurring the extra cost of a second policy,” says Eric Madia, vice president of product for Esurance.

Finally, combining your auto insurance policy with existing homeowners’ or renters’ policies from the same company could lead to even greater discounts overall.

Take a Combined Policy Test-Drive
Many factors shape one’s insurance premium, and driving is only one of them. In some states, insurance companies use credit scores as one element in determining rates. So you may have some choices to make, based on your separate driving and financial histories.

For example, what if your spouse has a decent driving record but a poor credit score? Or what if you’re a great money manager, but your lead foot has recently scored you a speeding ticket?

You should first get a quote for adding your spouse to your insurance or vice versa, says Jean-Marie Lovett, president of independent insurance agency MassDrive Insurance Group in Boston. Asking for a quote doesn’t obligate you to follow through with the change. (If your spouse is a champion speeding-ticket holder, however, you might have to list him or her as an excluded driver in your household. More on that in a moment.) Lovett says it’s a good practice to first get quotes for two drivers on one policy.

If putting the policies together does not help you save on the premium, you can just list your spouse on your policy and defer them to their own individual insurance, Lovett says.

When it comes to credit scores, one of the smartest things you can do is place the person with the best credit score as the primary named insured. “Their credit is the one that will be portrayed to the insurance company,” Lovett notes, “and will be the credit score that the insurance company will rate off of.”

Keep in mind this is only true in states where it’s legal to use credit scores as a rating factor. Some states, such as Massachusetts and California, do not permit the practice. In that case, Lovett explains, the person with the best driving record should be the primary insured.

Still unsure on whether to combine policies? It can help to know the value of your cars. “Maybe your spouse has a good driving record,” Lovett says, “but a junker of a car.”

“If you have a 1995-2005 vehicle, you should debate whether to have collision coverage, or increase the collision deductible to $1,000,” she continues. “Cars that get over the 10-year-old mark tend to take a significant drop in value, and you want to weigh the cost of the collision coverage on the vehicle versus the actual value of the vehicle.” She adds that in the event of an accident, having the $1,000 deductible “gives you the option to junk the caror make a claim while keeping your insurance premium manageable.”

When Not To Combine Policies
Though you’re now joined in holy matrimony, there are some cases in which it just doesn’t make sense to bring that partnership to your car insurance. Esurance warns that if one of you has a truly poor driving record, separate policies could end up costing you less.

“Combining a low-risk driver’s policy with a high-risk driver’s will likely increase the low-risk driver’s car insurance rates,” according to Esurance. There’s also the chance that your insurance company simply won’t insure your accident-prone partner, no matter the cost. “If one spouse has more than three accidents, your insurance carrier may not accept the spouse,” Lovett says.

Here’s where the really bad news comes in: Even if you don’t combine policies, simply living under the same roof as a high-risk driver could have a negative impact on your car insurance rates.

Esurance explains why: “Because insurance companies consider the driving histories of all family members living within the same household when underwriting policies, having a high-risk driver under your roof makes you riskier by association.” Car insurance follows the car, so your policy would have to cover the damage if your spouse caused an accident on an errand in your vehicle, for example.

There may be a way around this, though. “In most states, you are required to list all drivers in your household on your policy,” Lovett says. “However, you can ‘defer’ someone, meaning they have their own insurance policy.”

Also called a driver exclusion, this is an easy way to keep insurance costs low, even if your spouse is high risk. Keep in mind that exclusion truly means excluded: If your spouse borrows your vehicle and gets into an accident, you’re responsible for any and all damages.

The Bottom Line
“Nine times out of 10,” Lovett advises, “it will be beneficial to merge the insurance” for a newlywed couple. And if it doesn’t make sense right now, Kuo recommends doing what you can to mitigate your high-risk profile. Taking a certified defensive driving course may unlock an automatic discount, or at least facilitate a negotiation for lower rates.

“Having a spotty record is inconvenient, but people usually have a chance to get lower rates just by shopping around and comparing prices across companies,” Kuo adds.

Additionally, Kuo points out that minor traffic violations usually do not haunt a driver’s record for more than three years. Staying clean for that long can also remove a driver from the high-risk pool.

Even if you can’t combine policies immediately, Kuo recommends taking another look at your insurance every now and then. If couples think it makes sense to combine their policies, they can meet with their agent for a review. “Many circumstances of life could change, such as work, age and even where they live,” Kuo says. As always, obtaining quotes from multiple companies can help you get the best deal.

Should You Fill Your Car’s Tires With Nitrogen?

A member of the Dodge Challenger owners’ forum was buying a new car from a dealer and noticed green valve-stem caps on all four tires. The salesman told him that the tires had been filled with nitrogen, which would keep the tire pressure and temperature more consistent and that it would prevent tire rot from the inside out. It wasn’t a free add-on, though. The “nitrogen upgrade” was a $69 item on the supplemental window sticker. Another forum member later posted that his dealer was charging $179 for this same “upgrade.”

Some dealerships and tire stores claim that filling your tires with nitrogen will save you money on gas while offering better performance than air. But a closer look reveals that nitrogen has few benefits and much higher costs. For starters, a typical nitrogen fill-up will cost you about $6 per tire.

Why Nitrogen?
The Get Nitrogen Institute Web site says that with nitrogen tire inflation, drivers will note improvements in a vehicle’s handling, fuel efficiency and tire life. All this is achieved through better tire-pressure retention, improved fuel economy and cooler-running tire temperatures, the institute says.

This sounds great in theory but let’s take a closer look at each of those claims.

  • Better tire-pressure retention: Over time, a tire will gradually lose pressure. Changes in temperature will accelerate this. The general rule of thumb is a loss of 1 psi for every 10-degree rise or fall in temperature. The institute says that nitrogen has a more stable pressure, since it has larger molecules than oxygen that are less likely to seep through the permeable tire walls.

    In 2006, Consumer Reports conducted a year-long study to determine how much air loss was experienced in tires filled with nitrogen versus those filled with air. The results showed that nitrogen did reduce pressure loss over time, but it was only a 1.3 psi difference from air-filled tires. Among 31 pairs of tires, the average loss of air-filled tires was 3.5 psi from the initial 30 psi setting. Nitrogen-filled tires lost an average of 2.2 psi from the initial setting. Nitrogen won the test, but not by a significant margin.

  • Improved fuel economy: The EPA says that under-inflated tires can lower gas mileage by 0.3 percent for every 1 psi drop in pressure of all four tires. The theory is that since nitrogen loses pressure at a slower rate than air, you are more likely to be at the correct psi and therefore get better fuel economy.

    If you are proactive and check your tire pressure at least once a month, you can offset this difference with free air, and you won’t need expensive nitrogen. We think this invalidates the “better fuel economy with nitrogen” argument.

    For many people, however, this kind of maintenance is easier said than done. Most people either forget to regularly check and top off their tires, or never learned how to do it in the first place. Even Edmunds employees (typically a pretty car-savvy group) were under-inflating or over-inflating their tires, according to a tire-pressure study we conducted a few years ago.

    And though tire-pressure monitoring systems (TPMS) now come standard on cars, a 2009 National Highway Transportation Safety Administration (NHTSA) study found that only 57 percent of vehicles with TPMS had the correct tire pressure. That’s because most systems are only meant to signal that a tire has very low pressure, not to show that the pressure is optimal.

  • Cooler running temperatures: When air is pressurized, the humidity in it condenses to a liquid and collects in the air storage tank you use at the local gas station. When you add compressed air to the tire, the water comes along for the ride. As the tire heats up during driving, that water changes to a gas, which then expands, increasing tire pressure. Because nitrogen is dry, there is no water in the tire to contribute to pressure fluctuations.

    But this fluctuation in temperature isn’t as significant as you might think. A 2008 ExxonMobil study plotted the changes in temperature over the course of various inflation pressures. The lines on the graph were virtually on top of each other. In other words, the change in temperature when using nitrogen was negligible.

  • Prevent wheel rot: Nitrogen proponents will also point out that water in a tire can lead to wheel rot. A tire engineer who anonymously maintains Barry’s Tire Tech, a blog on a number of tire issues, says this isn’t really a problem with modern cars.

    “Alloy wheels don’t really have a problem with water inside the tire,” the engineer writes in a post on nitrogen inflation. “They are coated to keep aluminum from forming aluminum oxide, which forms a crust, which isn’t very attractive. But even then, this crust protects the aluminum from further corrosion from the water.”

    Where wheels have problems is when the aluminum alloy contacts steel, such as the steel spring clip used on wheel weights. It’s a particular issue when salt is present, the engineer writes. “But this problem is totally independent of the inflation gas,” he says. “Steel wheels only have a problem if the paint is damaged.”

Cost and Convenience
Let’s say a person bought a set of tires at Costco, a place that uses nitrogen to fill all the tires they sell. If he needs to top off the tires with more nitrogen, he won’t be able to go to just any gas station. He can use regular air if there is nothing else available, but that would dilute the nitrogen in the tires. He’ll have to go back to Costco and wait until the tire technicians can attend to the car. On a busy day, he could be there awhile.

Nitrogen is free at Costco and at some car dealerships we called, but these are rare cases. We called a number of tire shops that carry nitrogen and found that the prices for a nitrogen fill ranged from $5-$7 per tire. Assuming our consumer was diligent about checking his tires monthly, he could potentially spend about $84 a year on nitrogen alone per tire. Compare that to the most gas stations, where air is free or a 75-cent fill-up for all four tires at the most.

Finding tire shops with nitrogen could be an issue, too. We called a number of large chains, including America’s Tire Co., Discount Tire and Walmart. None carried nitrogen.

Is Nitrogen Worth It?
The air we breathe is made up of 78 percent nitrogen, 21 percent oxygen and a few other elements. To get the desired benefits for tires, nitrogen needs to be at least 93 percent pure, according to nitrogen service equipment providers quoted on Tirerack.com. So we’re basically talking about adding an extra 15 percent of nitrogen and getting rid of as much oxygen as possible.

Based on cost, convenience and actual performance benefit, we don’t think nitrogen is worth it. A much better use of your money would be to buy a good tire-pressure gauge and check your tires frequently. This is a good idea even if you have a tire-pressure monitoring system in your vehicle. The warning lights aren’t required to come on until you have less than 25 percent of the recommended tire pressure. Having the correct tire pressure will get you many of the benefits of using nitrogen and will ensure that your tires last longer.