Auto Insurance Pricing Discrepancies for Policyholders
My girlfriend and I have been living together for three years, and we’re looking to combine our auto insurance to save some money. Surprisingly, the premium varies significantly based on who is the primary policyholder. When my girlfriend is listed as the primary and I’m added as a driver, the premium skyrockets to almost $700 a month. However, if I’m the policyholder, it drops to about $350.
For context, we’re both 22 years old and have one accident each; hers was reported without any repairs, while mine involved $4,000 in damages. I’ve held my license since I was 16, and she obtained hers at 20.
If there’s any additional information needed, feel free to ask in the comments. I’m just trying to make sense of these differences!
Insurance rates can vary significantly based on a number of factors, even among individuals who are very similar. Here are a few potential reasons why you’re seeing such a dramatic difference in premiums based on who is the primary policyholder:
Driving History: Your driving record plays a big role in determining your insurance rates. While both of you have had accidents, the severity and the nature of the claims can greatly influence rates. Your $4,000 damage claim could indicate a higher risk to insurers compared to her less severe incident.
Insurance Score: Insurers often use a proprietary scoring system that takes into account various factors like credit score, claim history, and more. If your girlfriend’s insurance score is higher than yours, it could result in a much lower premium when she’s the primary policyholder.
Age and Experience: Even though both of you are 22, your longer experience behind the wheel since age 16 may benefit you more when you are the primary driver on the policy.
Car Model and Value: The type of car each of you drives can influence rates. If there’s a difference in the cars’ safety ratings, theft rates, or repair costs, that could be a factor as well.
Location: If your living area has specific risks, like high theft rates or accident rates, it could impact the rates differently depending on whose name is on the policy.
Gender: In certain markets, insurers may take gender into account, as statistically, males may be considered higher risk, particularly at younger ages.
Policy Discounts: Different discounts may apply based on the primary driver—like multi-policy discounts, good student discounts, etc. Your profile might align better with certain discounts when you are the primary policyholder.
It’s always a good idea to shop around and get quotes from multiple insurers to see if you can find a better rate. Additionally, discussing these discrepancies with your insurance agent could provide more insight into why the numbers are so different.