Just as the title says, Geico reduced my 6 month premium after adding an additional driver (my partner) by 30%. I don't understand how that makes sense from insurance PoV ? The high premium initially was because I was the only driver and I have some incidents on file from the last 3 years. My partner is a newer driver with no incidents. Even if I added my partner, I would still be primarily driving the car. How does the liability decrease from insurance PoV ?
Insurance reduced by 30% after adding partner with clean driving record as additional driver. But how does it make sense?
byu/proteenator inInsurance
Posted by proteenator
5 Comments
Insurance policies are based around the risk of an accident. Your premium dropped because your partner’s clean driving record shows a driver with less risk of causing or having an accident than yours. The longer that a driver has a clean driving record, the less risky they’re perceived by the underwriters who assess risks.
Insurance premiums are a prediction of how much your company expects you to cost them (this is a gross oversimplification, but just roll with it). These predictions are based on models where the carrier looks at its historical data for many data points across many customers, applies statistical techniques to account for correlations, and applies some judgement to try and make the predictions prospective (e.g. accounting for inflationary trends).
Since your premium reduced, it means the addition of your partner makes your expected policy costs lower. This is because in GEICO’s historical data, they observe lower payments to policies with two drivers (one incident-free, one with incidents) than they observe on policies with a single driver who has prior incidents.
I hear you that it might not seem logical, especially if you are still the primary driver. But GEICO isn’t doing an individualized assessment, they are just saying ‘people with these policy characteristics in the past require $X to insure’. And with the addition of your partner X got smaller.
The idea is that before adding your partner, you (a not so great driver) was driving the car say 10,000 miles a year, and that had its measured risk. But now with the additional good driver on the policy, even tho that might mean the car is getting driven 13,000 miles instead, that 13,000 is made up of 7,000 miles by you the bad driver and 6,000 miles by your partner, a good driver. And the 6,000 miles driven by your partner are considered “safer” than an additional 3,000 from you. (Note those numbers are pulled out of thin air just to illustrate the point).
Also, adding your partner might’ve changed your marital status on the policy as well, which gives you a better rate too.
They’re going she teaches you something.
Younger married men are less of a risk then young single men.
Probably credit, partner, married, whatever they typically use higher credit of the 2.