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Auto Insurance

What is a Multi-car Insurance Policy?

If your household has more than one car and driver, you may be able to save money by putting everyone into a single multi-car policy. Find out if this solution makes sense for you and your family.

What is a Multi car Insurance Policy

Insurers often offer discounts or incentives for insuring multiple cars under the same policy. In some cases, it’s possible to save money with a multi-car insurance policy because you’re insuring more than one vehicle with the same company. However, getting car insurance for a family may involve changing carriers or dealing with a higher rate than family members would otherwise be charged. Read on to learn the key considerations you’ll face when looking for a multi-car policy.

Why Get a Multi-car Insurance Policy?

With a car insurance family plan, you may be able to save on your insurance premiums. For example, some insurers may offer as much as 25% off regular insurance rates when you opt for a family car insurance plan. In addition to discounts, you can also benefit from having a single deductible for all vehicles on the policy.

You may also be able to take advantage of what’s known as car insurance stacking if your state allows it. Stacking occurs when you combine coverage limits for underinsured or uninsured bodily injury motorist coverage on an insurance policy for multiple cars. This means that if you get into an accident with an uninsured or underinsured person, you’re covered for the sum of all policy limits. You’ll also get one bill and a single renewal date, which may make it easier to keep track of your insurance bills.

When to Not Consider a Multi-car Policy

There are situations where a multi-car policy may not be the best choice, such as if one of the drivers you’re thinking of including has a poor driving record. This could result in higher rates for everyone else on the policy. Also, if the cars have very different values — such as if one of the vehicles is an exotic sports car while the others are standard sedans — the overall amount may end up being higher than it would have been if you had insured each vehicle individually.

Eligibility Criteria For Insuring Multiple Cars

The criteria required by your insurance company or state for insuring multiple cars vary, but most insurers follow these mandates:

  • All vehicles may have to be housed at the same address. This means only cars that stay at the same home can be part of a multi-car policy. Vehicles housed elsewhere, such as at summer homes or borrowed by a friend, cannot be part of the family car insurance policy.
  • You may have to have at least partial ownership of each of the vehicles. It can be tempting to include every car parked in your driveway. However, unless you have at least some partial ownership of it, it might be excluded from your multi-car policy. For example, if your friend is living with you and drives their parent’s old car, you may not be able to include it in your insurance policy.
  • If you do not have at least partial ownership of each of the vehicles, all additional drivers may have to be in the same household. Any additional drivers added to your insurance policy must live at the same address as you. This means parents cannot add their children to their policy unless they still live at home.
  • You may have to limit the number of cars you list on the policy. The amount of cars you can add to single multi-car policy may be capped at 5 or more, depending on your insurer.

Keep in mind that with some insurers, you may still be eligible for a multi-car discount even if each vehicle has a different policy, as long as the owners reside at the same address.

Can You Have Multiple Drivers on Insurance for Multiple Cars?

It’s possible to have multiple drivers on insurance that covers multiple cars. While it may depend on your insurance company’s requirements, it’s common for insurers to allow more than one driver on multi-car policies. The insurance company may adjust the premiums to account for the increased risk that the multiple drivers may present.

What Is Coverage Stacking for a Family Car Insurance Plan?

Coverage stacking combines the amount of coverage you get for uninsured or underinsured motorist coverage, enabling you to cover the cost of each accident by combining the limits from multiple vehicles. 

For example, suppose you have two vehicles insured on the same policy. Each policy gives you $125,000 per person and $350,000 per accident that involves an uninsured or underinsured driver. If you’re allowed to stack coverage, you may be able to add these together. In other words, if either of the cars gets into an accident, they may be covered for $250,000 per person and $700,000 per accident.

How Many Cars and Drivers Can You Have on One Family Car Insurance Plan?

It is common for insurers to set limits on how many cars and drivers you can include on a family insurance plan. For instance, you may be limited to four or five vehicles. Your company may allow you to associate one or two people with each vehicle. Using this provision, some people may choose to list their spouse or a roommate on their policies so they’re covered if they get into an accident.

If there’s someone you’d like to include on your policy who does not live in your household, you may still be able to list them. For example, you may want to add your child who is away from home in college, but usually drives your car whenever they visit. Ask your insurance company if this is an option on your policy.

How to Get Multi-car Insurance

The process of getting multi-car insurance is much like getting standard single-car insurance. You should first make sure the plan is right for you, then determine your coverage needs, compare quotes from different insurance companies, and sign up for coverage.

1. Ensure a family car insurance plan is right for you

Determine if you’re eligible for a multi-car insurance plan. Some insurers, for instance, may require the vehicles on the policy to be owned by people who are related to each other, or that you as the policyholder have at least partial ownership of all the vehicles.

You may also want to factor in whether you’re going to save money by choosing a multi-car insurance plan, or if it would be more cost effective for everyone to get their own policy. If one or more drivers has a poor driving record, this may drive the cost of the policy higher than it would be with a single-car policy. The same goes for when one or more vehicles are particularly expensive.

2. Determine your coverage needs

Your coverage needs will depend on:

  • The value of each vehicle
  • Where you live and where the cars are kept
  • The driving habits and skills of each person who will be listed on the policy
  • The cost of repairing each vehicle for different kinds of common accidents
  • The medical expenses most common for car accidents in your area

In some cases, you may want to get more than just basic liability coverage. For example, some states require uninsured and underinsured motorist coverage, and even in states that do not have additional auto insurance mandates, you may want to opt for additional coverage based on your own driving habits.

3. Compare quotes and discount options

It’s important to compare quotes from different insurers before choosing which multi-car policy is right for you. In some cases, a multi-car policy from one company — even after discounts — will cost more than individual policies from another company, even if the multi-car policy comes with discounts.

Many people can also save by bundling their multi-car policies with home or renter’s insurance from the same insurer. For example, if you already have home insurance with one company, you can ask that same insurer if you can also purchase a multi-car policy. Because you’re offering extra business, the company may reduce your rates.

4. Get coverage

To get coverage, you may have to collect information such as the make, model, and year of all vehicles, their vehicle identification numbers (VINs), and odometer readings. You’ll also need to submit personal details for each driver, including their dates of birth and driver’s license numbers. Once you have this information and have identified the best insurer for everyone’s needs, you’re ready to sign up and get started. You may contact insurers directly to get quotes, or work with a licensed agent or broker. Your coverage would begin with the first premium payment.