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The multi-car insurance policy is a great option for people with more than one car. It allows you to bundle all of your vehicles together into one package. You can save money on coverage and get better rates in the process.

Multi Car InsuranceIf you have more than one vehicle at your house, you may want to check into getting a multi-car insurance policy. A multi-car policy allows you to get car insurance for two cars or more on a single policy, which usually comes with a fairly big discount, typically from 10% to 25%.

Here is everything you need to know about multi-car policies.

KEY TAKEAWAYS
  • Multi-car insurance policy may help you save between 10% and 25% on your premium, although it varies by insurance company.
  • You can insure max 4-5 vehicles kept on the same address on a single insurance policy. Also, you can have the same amount of liability and underinsured motorist coverage on each vehicle.
  • One renewal date, discounts, single insurance deductibles for all vehicles, are some of the benefits of multi-car insurance policy.

What is a multi-car policy?

A multi-car policy covers more than one vehicle that is kept at the same address. These policies tend to be pretty popular as they are usually cheaper than separate polices and often include a discount for each car insured.

How much is a multi-car discount?

While it varies by insurer, in most cases you should save between 10% and 25% on your premium with a multi-vehicle discount.

Among insurers CarInsurance.com reviewed, Geico had the biggest multi-car discount. Here’s how companies compare:

  • Geico: up to 25%
  • State Farm: up to 20%
  • Travelers: up to 8%
  • Progressive: average savings of 12%

When shopping for coverage, be sure to contact at least three different insurance companies to see which one offers the best second car insurance cost.

Always make sure you are comparing apples to apples when it comes to coverage levels and deductibles and get car insurance quotes from multiple insurers.

Can you add a car to your insurance online?

Once again, it will vary by insurer but in most cases you should be able to add a vehicle to your policy online. It may pay to talk to your agent when adding a vehicle to see if there are any additional discounts you may now qualify for after adding another vehicle.

What are the requirements for a multi-car policy?

These policies come with a pretty simple requirement, you need to insure two or more passenger vehicles on the same auto insurance policy. It’s that simple.

In most cases, the most basic rule is that all of the cars must be located at the same address. After that, car insurance companies’ rules vary. Some insurers offer a discount only if the insured autos are in the same household and insured by related parties. Other insurers only require that the cars are garaged at the same address, and it doesn’t matter if you’re related or not, as in roommates sharing a home.

Some insurers will go a step further and even give a multi-vehicle discount to residents at the same address even if you have separate car insurance policies with them. There may be a limit to the number of cars you can have on a single policy. Usually, the max is four or five.

When adding a car to insurance, you’ll need to provide your insurance company with standard info:

  • Make, model, and year of the vehicles you are adding to the policy
  • Vehicle identification number (VIN)
  • Odometer reading on the vehicles
  • The name, date of birth, and driver’s license numbers of other drivers you want to add to the policy

You can qualify for the discount mid-term if you place an additional car on your policy.  Conversely, if you delete a car mid-policy and are insuring a single vehicle, your discount would stop.

Does the coverage need to be the same on each vehicle?

Yes and no. Most insurance companies require that you have the same amount of liability insurance and uninsured motorist coverage on each vehicle, but when it comes to collision and comprehensive you have some choices.

In general, your liability, uninsured motorist and other required coverage limits must be the same on all vehicles. That means if you have liability limits of 100/300/50 on the first car, you need those same limits on the second vehicle as well.

Car insurance companies, and state laws, normally require that liability limits on all vehicles on your policy are the same, so there is no confusion as what your liability limits are on any of your vehicles if you’re in an accident.

When it comes to other coverages you have more control. You can usually carry collision and comprehensive on one car and not another. The same is true for add-on coverages, such as rental reimbursement or custom car and equipment coverage.

Always remember that it’s the car that is insured, not the person.

This means that if you have different coverages on the various cars, the coverage specific to each car is the coverage that will be applied after an accident. As an example, let’s assume you have two cars on your policy, one with full coverage (collision and comprehensive) and one carrying only liability. If the driver of the first car on the policy, the one with full coverage, were to drive the second vehicle (with only liability), he or she would have only liability coverage if they were involved in an accident, since that is the only coverage purchased for that vehicle.

This also means that whoever drives the first vehicle (full coverage) would have collision and comprehensive coverages available as well as liability if they were in an accident since those are the coverages on that particular car.

When adding another car, driver or both to your car insurance policy it’s a great time to compare car insurance rates.  Your present car insurance company may no longer have the best multi car insurance rates when you factor in the additional car and driver.

How much coverage should I carry?

In order to be out on the road legally, you need to carry at least the minimum liability amounts required by your state in order to fully protect your assets and prevent you from having to pay out-of-pocket for accident damages or injuries you cause.

However, state required minimums can be extremely low and can leave you underinsured in the event of a major accident. Insurance.com Senior Consumer Analyst Penny Gusner recommends buying a policy that pays 100/300/100, which means you have liability coverages of:

  • up to $100,000 for the medical bills of those you injure
  • with a $300,000 cap per accident for bodily injury
  • and up to $100,000 to repair other drivers’ cars and property that you damage

You should also consider adding the optional coverages of comprehensive and collision insurance if your car is less than 10-years-old. If the car is financed, your lender will likely require you carry both.

Collision pays, up to the cash value of the car, for damage to your vehicle after an accident and comprehensive pays for damage from flooding, fire, hail and vandalism, and for theft.  Insurers allow you to carry comprehensive and collision on one car but not another, so this is a per car decision.

What are the benefits of a multi-car policy?

While the discount is the big benefit, there are a couple of other advantages to going with a multi-car policy.

Pricing: Most insurers offer a fairly big multi-car discount. While it varies by insurer, you can expect savings of 10% to 25% with a multi-car policy. When compared to other discounts such as paperless policies or good student discount (these are often in the 5% to 10% range) a multi-car discount is significant.

Each vehicle gets this discount, but the discount doesn't compound with each car you add.  So, if the discount is 10%, your first car will get 10% off no matter if you add two or four other cars to the policy

Single insurance deductible for all vehicles: In the event that more than one of your vehicles is damaged in the same incident (a severe storm or tree falling for example) you will only have to pay one deductible. This means that if you are carrying a deductible of $500 on your policy you will only have to fork up $500 to fix both cars, as long as they were damaged in the same incident.

Car insurance stacking: In states that allow it, you can stack your uninsured or underinsured bodily injury motorist (UM/UIM) coverage when you have multiple vehicles on the same policy.

For example, if you’re insuring two cars with uninsured motorist bodily injury coverage with limits of $100,000 per person and $300,000 per accident (100/300) and stack your UM coverage, your limits would double to 200/600.

The more cars you insure, the higher your stacked coverages would go. Choosing to stack your coverage will often cost a bit extra.

One renewal date: A multi-car policy allows you to insure all your vehicles with one policy with one renewal date and one payment date. If you get a separate insurance policy for each vehicle you not only miss out on the discount, but you also have to keep track of multiple bills and due dates each month.

Additional questions about multi-car policies

Here are the answers to the most common questions we get about multi-car policies:

Can I add other family members’ cars to my policy?

Adding a vehicle to an existing insurance policy usually requires that you or your spouse owns the vehicle. If someone else owns the car, then that person needs to get his own policy for the vehicle.  However, you may still be eligible for the discount with some insurers.

For instance, if your adult child resides with you and has his vehicle insured through the same carrier as your vehicles, then some insurers will apply a multi-car discount to both policies. Other carriers will not allow this, the best advice is to call your insurance agent and ask if this is a possibility.

Can I insure a car and a motorcycle on the same policy?

No, since the motorcycle would need a motorcycle policy and not an auto policy. There is a benefit though from insuring both of these vehicles with the same car insurance company -- you should be eligible for a multi-policy discount, which can be up to 20%.

You can still get a home and auto insurance bundle discount

When you call for second car insurance cost quotes, it never hurts to ask for a bundling discount if you also insure your home with the same insurance company. In some cases, insurers will cap the number of discounts you have applied to your policy. However, car insurance companies typically will allow you to have both a multi-car discount and a home and auto insurance bundle discount, says Gusner. This is great news, as car insurance savings for bundling auto and home policies with one insurance company averaged about 12%, based on an Insurance.com rate analysis.

I have a vacation home in another state, can I have one car insurance policy?

Typically, your cars should be insured in the state where they're located.

For example, let's say you're a snowbird with a second home in Florida. If your car has a Florida license plate and registration, it must be insured by an auto insurance company licensed to do business in Florida, says Gusner.

If your main residence is in Ohio, for example, you'll have to have your cars that are based there insured by an auto insurer licensed to do business in that state.

If your auto insurance company is licensed to do business in both states, you can buy all your car insurance through one company, Gusner says. By insuring several cars with one company, even if they're located in different states, you might be able to qualify for a multi-car discount.

Can you have two car insurance policies?

This one is easy if you mean, can you have two car insurance policies on two different cars. The answer there is absolutely. If you want to keep separate policies for your vehicles, that is usually not a problem.

The answer is also yes if you are considering two insurance policies for the same car as long as it is with two insurance companies. Insurers will not write two policies for the same vehicle. While you are legally entitled to carry two polices on the same vehicle there is no actual benefit and it a waste of money. Only one insurer will pay out, you cannot file a claim with each insurance company for the same accident so the benefits of two polices is basically nil.

Can a child in college still be on a multi-car policy?

If your child is away at college in your home state and brings his vehicle with him, you can typically keep him on your family's insurance policy if your home address is still considered his primary residence, Gusner says. But you should contact your auto insurer because your premiums may change based on the insurance rates in the ZIP code where your son will reside while he's at school.

You also should talk to your insurance company to see what might need to change if your child is going to school out of state, she adds.

Once your child moves out, your insurer probably won't want to keep insuring that vehicle as part of your policy, Gusner says.

Is it ever a bad idea to get a multi-car policy?

If a driver with a lousy driving record or a much higher end vehicle moves into your home (a parent, sibling or even a roommate) It is probably not a great idea to add them to your policy.

There is a very good chance that your rates will actually be headed up if they have a poor driving record or drive a vehicle that is in another class than yours (think Mercedes Benz while you drive a Hyundai) as your insurer will consider all of those factors when setting a rate.

Luxury cars come with a much higher premium than a standard vehicle and even one or two tickets on a person’s driving record can push the rate dramatically. The best advice is to get at least five multi car insurance quotes for both you and your roommate as well as a policy just for you and look at the price difference.

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