Okay, you’re back from your honeymoon. You’re settling in to your new routines as man and wife. Aren’t you forgetting something? Sure, you need to write down your anniverary date (this applies mostly to guys), but that’s not it.
You need to take a look at your insurance. Let’s look at the exposures that most couples would have:
Autos– Before you were married, you each had your own vehicle and your own auto insurance. He had coverage with company X and she had coverage with company Y. “What’s wrong with that?”
Well for one thing, neither of you are getting a multi-car discount. This discount is usually from 10-20% of your premium. How’s that for a wedding present?
The other main reason is you are both very likely to have different limits of coverage. This can be very confusing and potentially disasterous. Let’s say you have $100,000 liability and your spouse has $25,000. You jump in your spouse’s auto since the vehicle was behind your’s in the driveway. You run into the back of another auto. Because of limitations in auto policies, your policy will not pay for damages done by you because of your use of your spouses’s auto. Your spouse’s policy would provide liability coverage for you, but only up to the limit on the spouse’s policy, which was $25,000 in this example.
Home– Most homeowners have insurance for their home. Most newlyweds are not homeowners. They usually rent. Because no one (like a mortgage company) is telling you to buy insurance, you don’t. That’s a big mistake.
Most newlyweds don’t understand their need for renters insurance. Renters insurance pays for damage to your belongings and things you may be responsible for to others. Renters usually don’t think they have enough to insure, but think again. When you add up all your clothes, furniture, electronics, etc, most newlyweds will be surprised at what it would cost to replace all this with new stuff. $20,000 is a minimum for most couples.
Renters policies will pay for fire, hurricane, theft, water damage (not flood) and a few other things. Also, imagine you leave some food on the stove cooking and get distracted by a phone call. Your landlord will get his insurance company to pay for his $10,000 damage. Then his insurance company will come after you (sue you). Your renters policy would pay the $10,000 for you.
What about that expensive ring you just got? If you have a renters policy, you can add the ring by “scheduling” it on your policy. When you schedule an item, you also get coverage enhancements for things like losing it or if the stone pops out.
Life insurance– “What?” “I’m so young.” Exactly!
You are both healthy now and can qualify. Since life insurance premiums increase with age, it will never be any cheaper than it is now. $250,000 in thirty year term costs him $27 monthly and her just $19 monthly at age 23.
Life insurance is not about hitting the lotto because your spouse dies. It is about replacing the income loss or increased expenses that occur when a spouse dies.
Retirement– I know you just got married, but the earlier you start planning, the more manageable this is. If you were to put $100 monthly in an annuity from age 23 to age 65, you would have over $125,000 based on current interest rates. It is so easy to procrastinate about retirement. Many of us have been so good at it, we still haven’t started. Don’t let yourself get put in this group.
The most important thing you can do now is to take the time to review your current policies. Make changes and additions where needed. You owe it to yourself and your new spouse. Congratulations on your marriage!