Multi-car insurance policies

Families with multiple vehicles can often benefit from a multi-car insurance policy. Most car insurance companies offer a discount to customers who insure more than one vehicle on the same policy. It can also be easier to manage one policy with a single premium. Learn how multi-car policies work to see if it’s the right option for you.

Key takeaways

• A multi-car policy is not a separate auto policy but one with a multi-car discount.

• Depending on the company, a multi-car discount can save policyholders up to 25 percent.

• A multi-car discount may not always be an option or the best option, depending on the vehicles you own and your insurable interest.

What is a multi-car policy?

Most auto insurance companies offer multi-car (or multiple-car) insurance policies. Multi-car policies are available through almost every insurance carrier and, in fact, are not different policies than a standard auto insurance policy. A multi-car policy means that a car insurance policy has more than one vehicle insured. A benefit of a multi-car policy is that most providers give discounts, usually known as a multi-car or multi-vehicle discount, for insuring two or more cars on the same policy.

The savings potential for a multi-car discount depends on your insurance company. For example, Progressive offers an average multi-car discount of up to 12 percent, whereas Amica and Geico offer a discount of up to 25 percent when you insure two or more cars.

Here’s how a multi-car policy works. Let’s say you own two vehicles. Rather than purchasing two separate car insurance policies, you could insure both vehicles on the same policy. You would pay one combined premium rather than two, and likely earn a multi-car insurance discount.

Each company is likely to have its own requirements for multi-car insurance policies. Some only require that all covered vehicles be located at one address, while other carriers factor in the vehicle owner’s relationship to the policyholder. It never hurts to ask carriers about their specific criteria for multi-car insurance policies. If multiple people live in your household, a multi-driver car insurance policy may apply as well.

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What discount can you receive for a multi-car insurance policy?

You may see up to a 25 percent discount on the total premium on a multi-vehicle policy. However, each provider’s discount percentage may vary. Here are a few companies that offer discounts for insuring more than one vehicle on the same policy:

Is there a limit to how many cars I can have on my policy?

Every company is different when it comes to how many cars you can insure on a single policy. Many companies can insure up to four vehicles on one policy before you need a second car insurance policy. Some companies can insure more than four vehicles on one policy.

In general, companies require that you have an ‘insurable interest’ in a vehicle before you can insure it. Insurable interest means that you have a financial interest in the vehicle. An example of this is a vehicle that you co-own. Whether that vehicle is covered and cared for matters to you because you have partial ownership.

If a company allows you to add a car to your policy that you don’t own or co-own, it may require the owner to be a household family member. Additionally, you may need to list that family member as a driver on your policy or as an insurable interest. Your insurance agent should have more specific information on their company guidelines.

How does coverage work on a multi-car insurance policy?

Most states require drivers to carry at least a minimum amount of car insurance coverage. You must meet the minimum coverage requirements to register your vehicle and legally drive.

However, many drivers can benefit from optional coverage, as well. Here are some of the car insurance coverage options that are common for multi-car insurance policies:

• Liability insurance: Liability insurance includes bodily injury and property damage coverage. It pays for the other driver’s losses if you cause an accident and they get injured or their vehicle gets damaged.

• Personal injury protection: Personal injury protection (PIP) is required in many no-fault states. It covers your and your passenger’s medical expenses after an accident, regardless of which driver was responsible.

• Collision insurance: When you cause an accident, collision insurance pays for your vehicle’s repairs. If your car gets totaled, your insurance company will pay your vehicle’s actual cash value determined at the time of loss, minus your deductible.

• Comprehensive insurance: Comprehensive insurance helps cover your vehicle’s repairs if you get involved in a non-collision incident, such as theft, vandalism, an accident with an animal, falling objects or weather-related damage.

• MedPay insurance: Medical payments insurance, or MedPay, provides coverage for your and your passenger’s medical bills if you get injured in an accident. MedPay is available in most states.

• Roadside assistance: Roadside assistance is an endorsement that covers basic car services if you get stranded. Most policies will help pay for things like fuel delivery, flat tire changes, and battery jumpstarts.

• Rental car coverage: If your vehicle gets damaged in a covered loss and needs to get repaired, rental car coverage will pay for a rental vehicle so you can still get around.

Certain coverage on a multi-car policy applies to all vehicles insured, like your bodily injury liability, property damage liability, and PIP/MedPay coverage. But other coverage, like comprehensive and collision, are unique to each vehicle. For example, if you’re insuring a brand-new car and a 15-year-old used car, you could choose to get full coverage on the new car and liability-only coverage on the used car. However, you could also carry the same comprehensive and collision deductibles for all your vehicles, but you are not required to do so by your insurance company.

When would a multi-car insurance policy not be an option?

While a multi-car policy can benefit some drivers, it’s not an option for every scenario. For example, if you want to insure a motorcycle, you must purchase a separate motorcycle insurance policy and cannot add it as a secondary vehicle to your personal auto policy. Even if your insurance provider offers motorcycle insurance, you wouldn’t be allowed to insure your bike on the same policy as your other vehicles.

The same goes for classic cars. If you have a classic car in your garage, you might want to purchase a specialty policy. Classic car insurance offers more tailored coverage for antique or rare older vehicles, such as higher reimbursement limits for repairs and coverage in transport. You generally can’t get these coverage options with a personal car insurance policy.

Another scenario where a multi-car insurance policy may be unavailable is if you’re a snowbird. If you split your residency between two states, for example, you may store your vehicles in two locations, one at each residence. If that happens, you would have two policies and not be eligible for the multi-car discount.

Frequently asked questions

• • Which company offers the cheapest multi-car insurance policy?

    While nearly every company offers some form of multi-car discount, it is impossible to say which company offers the most affordable for each kind of driver. Because there are so many factors that impact car insurance prices, the cheapest car insurance company offering a multi-car policy may also be one offering you important coverage in other areas, like for ridesharing. Experts often suggest obtaining quotes from several insurers to find the best company for you.

  • What are stacked insurance limits?

    Stacked insurance can be an added benefit with a multi-car policy. When you have stacked coverage, the true limit of uninsured or underinsured motorist bodily injury limit depends on the number of vehicles in your household. For instance, let’s say you have $20,000 per person, $40,000 per accident in stacked uninsured motorist bodily injury coverage on your policy, and with two vehicles in your household. This means your true uninsured motorist bodily injury limit is $40,000 per person and $80,000 per accident since 20/40 multiplied by two is 40/80.

    In addition to the money saved from discounts, stacking may allow you to combine or “stack” the uninsured motorist or underinsured motorist coverage limits that you have on each of your vehicles. By doing this, you can typically increase your overall limits by considerable amounts. It is important to note that stacking may not be available in every state, and it can cost more. Also, it may not be in your best interest to “stack” your coverage if you’re insuring one vehicle, but it’s best to speak with a licensed agent about your situation.

  • Is it worth getting multi-car insurance?

    A multi-car policy could allow you to easily manage coverage for multiple vehicles stored at the same household or even save on your overall premium. However, it may not always be the best option, or one that is available for you. For example, if you have a standard personal auto and a motorcycle, those cannot be insured on the same policy, and you probably won’t be able to get the multi-car insurance discount. If you have a personal auto and a classic car, you might be able to insure them on the same policy for the multi-car discount, but you could be sacrificing the coverage you need for your classic car.