Insuring one vehicle can already be expensive, but what happens when you have to insure multiple vehicles? Luckily, most providers offer discounts for multiple cars to hep save you money on car insurance.
In this article, we will explore multi-car policies, how they work, how much they can help you save, and how to find the best car insurance discounts.
What is a Multi-Car Policy?
Vehicle insurance policies typically cover just a single car at a time. A multi-car insurance policy is a single auto insurance policy that allows you to cover more than one vehicle at a time.
You can pay just one car insurance premium for two or more vehicles. Multi-car policies aim to simplify the car insurance process for their insurers while trying to save on coverage for each vehicle. The insurer typically requires that all cars be kept at the same address to qualify for a multi-car policy.
Some insurers may use the word "garaged," which means the vehicles must be parked at the insured address described on the Declarations Page.
However, most insurers will allow a college student to have a different address and remain on the multi-vehicle policy. It's essential to inform the insurer that a vehicle is "garaged" at a different location.
How Does Multi-Car Insurance Work?
A multi-car insurance policy works like a single policy. You would have to decide the coverage features, the baseline amount, deductible, liability coverage, and all the other basics.
With multi-car insurance plans, the policyholder is sometimes the owner and driver of all the vehicles covered. When filling out the quote, you must provide information about the number of cars the policy would protect, detailed information about each vehicle, including who owns and drives each one, and the drivers’ license numbers.
In a multi-car policy, some distinct coverages can apply to some or all of the vehicles covered, while some coverages are shared across each car.
For example, general features like liability coverage, bodily injury, and property damage will apply to all vehicles covered in the policy. While other coverages like comprehensive and collision coverage may apply to just one or some of the cars.
Alternatively, all vehicles can be protected by full coverage. What coverages to decide on will depend on factors like the nature of each car covered, who uses which, and the value the owners place on each one.
Benefits of Multi-Car Policies
Multi-car policies provide several benefits, from their potentially significant discounts to the ease and comprehensive coverage they tend to provide. Here are some of the top benefits of multiple car insurance plans:
Discounts that Help You Save More Money
Most car insurance companies aim to provide their subscribers with the best auto insurance coverage and strive to help them save more money. However, in most instances, you will find the best deals and discounts offered by your insurer tied to their multi-car insurance policies.
Opportunities for Stacking Your Insurance Coverage
While some state regulations do not allow for stacking insurance coverages, and some insurance policies may not support it, multi-car insurance policies provide you with opportunities to stack your insurance coverage when the circumstances allow it.
Stacking coverage is popular with car insurance coverage options like uninsured motorists (UIM) and personal injury protection (PIP).
For example, suppose you and your spouse or some other family member have purchased a multi-car policy with uninsured motorist coverage. In that case, you can stack the policy coverage on each car to have the total covering each vehicle at all times. That way, you would get more compensation while paying less for the premium.
Due to individual state restrictions, you cannot experience nationwide benefits by stacking your insurance coverage.
Away from opportunities to save more and maximize compensations, multi-car policies make your auto insurance processes easier for you. Once you sign up all the cars, you are responsible for one multi-vehicle insurance deal, and your processes become streamlined.
You only make payments for all vehicles once and only have one renewal date to keep track of. You may only have to consider setting up and readjusting different coverage plans for each car.
Of course, the benefits of multi-car policies are maximized only when you sign your vehicles up for insurance with the same company and specifically choose a multi-vehicle discount. If you had just one vehicle insured before, and you have now purchased a second car, you could make a switch to a multi-vehicle policy at the point of renewing your policy for the old car so that both cars can be insured for less than the price you would pay if you were to insure them separately.
How Much is a Multi-Car Discount?
Multi-car discounts vary across car insurance companies and premium plans. Most insurance providers offer discounts as a certain percentage of the premium rate you would pay if you were to insure each car separately. Discounts mostly range between 10% to 25% with some coverage options.
It is best to check car insurance discounts not just from the percentage perspective alone since base price and premium rates tend to vary across various auto insurance policies.
That said, quantifying multi-policy discounts is a summation of several factors, including coverage levels and several other unique add-ons you may be particular about going for. While premium rates vary across companies, many insurance companies have several options with different coverage limits and benefits.
How Much Does Multi-Car Insurance Save?
The average cost of auto insurance for a single car is about $2,014 annually for full coverage (as of August 2023). When you, however, choose to go for a multi-car insurance plan, you earn a certain discount per each new car added, which helps you save money in the long run. Discount rates vary across companies and coverage plans, but you can get a discount between 10% to 25% with most programs. That said, there is no fixed amount for how much multiple car insurance can help you save.
Remember that other factors, such as the types of vehicles, the driving records and credit scores of the owners, the state of the car and mileage, location, and the age of drivers of the vehicles, may influence policy rates.
What's Required for Getting Multiple-Car Insurance?
You will need to supply the same information you'd provide when subscribing to a single-car insurance plan, only that you will have to give details for each car involved. Multi-car policies are generally only available to those that live in the same household.
It is important to discuss with family members to find the best deals, understand their vehicles' condition, and obtain additional information. Having these details at hand will make filling a quote faster for you.
The most important details you will need to provide when filling out a quote are:
- The Vehicle Identification Numbers (VIN)
- Approximate weekly or annual mileage
- Driver's license number for each driver
- The name of the driver who drives each vehicle most often
What Coverage Options Are Available?
There are no special types of coverage options in multi-car discounts. The same coverage options in single insurance plans can apply in shared and multi-car insurance plans. However, what coverage is selected and how they are used for each vehicle in the policy can differ.
Different insurance companies also provide additional coverage options for their subscribers. Therefore, you may only find certain coverage options and combinations in specific companies alone.
The most popular coverage options covered by auto insurance plans are:
- Liability coverage - includes bodily injury liability insurance and property damage liability coverage.
- Personal injury protection (PIP) or medical payment protection
- Uninsured/underinsured motorist coverage
- Collision coverage
- Comprehensive coverage
- Emergency road service
- Rental reimbursement
Can I Customize the Coverage Levels for Each Car on My Policy?
In a multi-car policy, you can insure your car for some or all of the coverage options highlighted above. Some coverage options, such as liability coverage, PIP, and uninsured coverage, are shared and will apply to all the cars covered.
You could then decide which other coverage options will apply to each car covered in the policy. This customization lets you save money and insure each vehicle based on its worth. For example, you could choose to insure a new or more expensive car for comprehensive and collision coverage, but you may decide not to do that for an old car or a car you use sparingly.
Are There Limits to How Many Drivers Can Be Added Onto Multi-Car Insurance Policies?
Each insurance company limits how many drivers or cars can be added to their multi-car insurance policies. Most multi-vehicle insurance plans range from allowing a minimum of 2 vehicles to a maximum of 6. Some companies may have different plans for the number of cars insured per time in each policy.
Of course, you should expect that the higher the number of cars added to the policy, the higher the overall premium rate will be. But considering this premium is shared among several vehicles, it is likely to lead to significant savings in the long run.
Who Can I Put on a Multi-Car Insurance Policy?
Some insurance providers will not allow you to add any random car driver or owner to the multi-car policy. Companies usually have regulations on what kinds of drivers can be added to a multi-car policy, their age, and the ownership level of the car they drive.
Some providers will only allow for cars the driver has an insurable interest in.
This is because having an insurable interest in a car indicates some level of ownership and financial responsibility towards the vehicle, thereby limiting reckless driving and ultimate damage to the car.
Additionally, if a claim is filed, insurance providers will write out any claim checks to the car's owner.
When Not to Buy a Multi-Car Policy
Just because you have more than one car might not imply that it's time to purchase a multi-car policy. It is essential to consider certain car insurance factors that can hinder you from getting the best rates and see how they affect your policy offers.
For example, the different ages of the drivers may impact your quote. Younger drivers are considered high-risk and will attract higher quotes.
On a separate occasion, it might not be ideal to bundle up a new luxury car and an old truck under the same policy since they have very different coverage needs. The luxury car's value will increase rates for such a policy.
If you must purchase insurance for both vehicles, buying the same coverage for the older car may not be necessary. In such a situation, it is wise to compare individual rates with multi-car policy rates and then go for the cheaper option.
Note that a multiple-car insurance policy is not the only way to earn discounts or save on insurance premiums. You could also be eligible for and benefit from other discount offers.
You should not jump on any policy simply because of its multi-vehicle discount. You should consider your unique situation, what exact features you are looking for in a coverage, your budget, and compare several auto insurance quotes before deciding whether a multi-car policy is worth it.
SteadyDrive is not an insurer or an insurance agent or broker. SteadyDrive does not provide you with an insurance policy, so make sure that you have insurance coverage while you drive. Please contact your insurer or an insurance agent or broker (if applicable) directly regarding questions you may have pertaining to auto insurance coverage. For more details, see SteadyDrive’s Terms of Service.
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