Insurers pushed to consider unmarried couples

The "Value Judgments" column published today in the Chicago Tribune focuses on the rising number of unmarried heterosexual couples and how insurance companies are beginning to respond to this trend.

Here is what columnist Janet Kidd Stewart had to say.

Pamela Lukas and Chris Grijalva celebrated 20 years of unwedded bliss recently. Long ago, the Irvine, Calif., couple decided that while they love each other deeply, they didn't want children and didn't want to commingle their finances. They don't even share a joint checking account for household expenses. He takes care of the groceries, she pays the homeowner's insurance, and they both pay into the mortgage.

Though the social stigma of living together outside of marriage has faded, Lukas, 50, says the financial toll remains.

"I regret that I can't put him on my medical insurance at work," she said of Grijalva, a self-employed computer consultant who has to buy his own insurance. "I've been living with him longer than my co-workers have been married, and they're all on the company plan."

Still, the risk manager for a restaurant chain has done the math and continues to choose independence.

"I wanted to have my own financial base," she said.

At the same time, millions of same-sex couples are fighting a legislative war to be allowed to do exactly what Lukas and Grijalva have shunned all these years.

"The movement for gay marriage has been the biggest advertisement for marriage in years," said Arlene Skolnick, author of several books on how social and economic change affects family life. "It's simply equal access that they want."

The debate has some potentially huge ramifications as we whittle away the relative financial advantages of the traditional family.

Think about it. Sure, there's the marriage tax penalty. But there have been plenty of big financial advantages to tying the knot.

Now more single people are buying homes and getting those juicy tax deductions--once largely the domain of the nuclear family. More employers are introducing domestic-partner benefits to attract the best and brightest, even as some of their legal teams scramble to figure out what they'll do about new state laws defining marriage as only between a man and a woman.

In San Francisco, an Internet-based insurance company is pushing the envelope on marketing to non-traditional families. Esurance (www.esurance.com) will write car insurance policies that offer multicar discounts to any qualifying group of people who share a garage--whether they are lifelong partners, an elderly parent living with an adult child, or college roommates.

"Pressure has been building on [government] insurance departments to more and more accommodate non-traditional families," said Robin Olson, senior research analyst for the International Risk Management Institute Inc., an industry association. Olson said such policies could have potentially negative underwriting outcomes and lead to higher premiums for all clients.

Not so, company officials said. Esurance executives say they can offer attractive prices to non-traditional families because their research showed a big predictor of a profitable customer (defined as one who makes few claims and pays premiums on time) was the simple act of insuring more than one car.

Of course, the proof will come in whether or not the larger insurance firms and bank underwriters begin to follow suit.

"Companies will be forced to look at non-traditional families because that's where the business is," Lukas said.

For her part, Skolnick doesn't believe the decline of the financial advantage for traditional married couples will bring back the communes of a generation ago.

"Marriage is going through a transition because of the cultural changes," she said. "But the old values will likely get assimilated. We tried communes, and they didn't work."