Can a Car Have Two Separate Insurance Policies by Two Different People?

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Can I Have Two Insurance Policies on Different Cars?

Having two motor insurance policies on different cars is legal. You can do so if your existing insurance provider does not provide coverage for one of your cars, such as a luxury car.

However, having two car insurance coverage on different vehicles can cost you more money. It may also be cumbersome to manage the renewal of multiple insurance policies.

To overcome this situation, you can purchase a multi-vehicle policy or motor floater policy, which covers multiple vehicles under one motor insurance policy. It not only helps you to save time but also reduces hassle and paperwork.


What is the unjust enrichment provision?

The conditions are written into the policy to ensure that auto insurance is used how it’s intended and that policyholders don’t manipulate the product to use it for some type of financial gain.

This is why the unjust enrichment clause can be found in the auto policy form.

Unjust enrichment is a legal term that’s used to describe that an insured party has profited by filing claims on an insured loss instead of being restored to their pre-loss condition.

If there are multiple policies for a single car and there’s a claim, it’s much easier for there to be a double recovery issue, intentional or not. Since this is the main definition of unjust enrichment, having two policies on one car can be risky.

Is Double Insurance Ever a Good Idea?

As stated above, double car insurance policies do not increase the value of your insurance cover. It only results in an increase in the amount of premium to be paid. Thus, having double vehicle coverage is not an economically viable option.

Few disadvantages of having double four-wheeler insurance policies include:

  1. Having two insurance policies may result in a delay in the payment of claims.
  2. Whether a car is insured for one or more policies, the compensation can be claimed from one policy only. An increase in the number of policies won’t increase the value of your insurance cover.
  3. Purchasing more than one insurance will also result in unnecessarily paying too much premium.

Thus, getting double coverage from multiple car insurance companies is complicated and definitely not a good idea.

Why is it illegal to have two policies on the same car?

In the insurance world, companies are supposed to be aware of the consumers that have multiple policies in their name. This is a major reason why companies communicate with one another and provide data to each other.

If someone has two policies, they can file a claim against each and receive double the money for a single loss.

The process of filing two claims for the same loss against two different policies is called unjust enrichment.

It is a legal term that’s used to describe a certain type of fraud that consumers are guilty of when filing multiple claims for one loss. If you do this, the insurer can prosecute and you could be convicted of insurance fraud.

Simply put, you can have two insurance policies in your name but only when you have multiple vehicles.

It’s up to you to decide if you want to insure all of the vehicles on the same policy. Get an online quote to see what the multi-car discount will save you and decide if it’s time to just have one policy.


Requirement of Insurable Interest

In order to insure something, whether it’s a life, a home or a car, you have to have what the insurance industry calls “insurable interest.” Basically, it means you stand to lose something if the item in question is damaged or destroyed. In the case of a car, the owner usually has an insurable interest. Your neighbor wouldn’t be able to insure your car because it wouldn’t affect him financially if anything happened to it. There are some scenarios in which more than one party can have insurable interest in a car though, such as co-signors and lien holders. If the car is wrecked, for example, a co-signor could be held accountable for any amount still owed on the vehicle, and the lender could be forced to take a loss if that balance can’t be recovered.

Can You Have Car Insurance Policies In The Same Household?

Two car insurance policies can be held in the same household for certain reasons. If someone in the household owns a classic or luxury car, they may need a different car insurance policy to cover that specific vehicle.

Insurance companies often require all members of a household who are licensed to be listed on a policy. If you hold two or more car insurance policies, you will likely have to add all of the other household members to each of your policies. Listing additional drivers can sometimes add cost to your plan, especially when a young driver is added. Because of that possibility, it is wise to stick with one auto insurance policy per household when possible.

What are some additional scenarios where it is advisable to have two policies?

Knowing when to drop your current policy and search for a new one is important if you are buying a new car or thinking about combining coverage. Here are three more scenarios where it is not a waste of time to bind a new policy:

Reasons for Duplicate Coverage
You Have a Luxury or Classic CarNot all insurance companies specialize in insuring all types of vehicles. Some companies may target the standard sedans and others might be great at insuring luxury models, exotic cars with a high value or classic collector cars that are hardly driven. Buying a standard personal auto insurance is not always appropriate. The insurer may not offer the special coverage options or terms that you need. Insure your everyday cars with one company and the others with a specialty company.
You Want One Policy to Have a High-Risk DriverIf you own more than one car that a high-risk driver in your home will only be driving, you can buy two separate policies and list that high-risk driver on only one. You may be required to exclude the driver from your policy that contains the vehicles that they do not drive.
You Want to Keep Your Loyalty DiscountYou can sometimes receive a loyalty discount for staying with a company for an extended period of time. If you buy a new car and the insurer is not competitive, you can purchase coverage elsewhere but keep your vehicle with your current carrier for the savings in the future. Duplicate coverage for the sole reason of keeping a discount is probably not cost effective.

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There are several advantages to combining insurance. If you are tired of the inconvenience of having multiple policies, it is time to price premiums for insurance on all of your cars with one auto insurance provider.

Start comparing car insurance rates now by using our FREE tool below!

What are the reasons drivers consider two auto insurance policies?

Can one car have two insurance policies? Yes, drivers use several reasons when they insure the same car with two different insurance companies. But as you’ve learned, in most cases, a single policy will suffice, and a second policy is just a waste of money.

For example, perhaps you want to make sure you have adequate coverage in the event of an accident. Instead of taking out a second auto insurance policy and facing potential fraud charges, invest in more coverage options.

What does fully comprehensive auto insurance cover? The details of a full coverage policy will vary by the insurance company. However, it almost always includes your state’s minimum required level of coverage and some level of collision and comprehensive insurance.

You can also add optional coverages, like roadside assistance programs and even rental car assistance.

Or, maybe you share a vehicle with a roommate, friend, or another household member, and you both want different coverage levels on the vehicle.

However, a second policy is still inadvisable. Paying for two separate policies will cost more than splitting a fuller coverage policy between two people.

If the roommate you share your vehicle with is a high-risk driver who struggles to receive affordable insurance rates, compare rates from multiple companies to find a policy you can both afford.

If you live with your significant other, you can still both be on the same insurance policy, so there is no need for you both to carry separate policies.

You can use an auto insurance comparison tool and input the information for all of the drivers for the vehicle and the vehicle’s information. The tool will then compare your information and auto insurance desires with all available policies.

Ultimately, you and your roommate are better off coming to an agreement and splitting the costs for a single policy.

As you can see, in most instances, having two auto insurance policies on a single vehicle is not a smart investment. Instead, explore your options with a single auto insurance policy.

A possible strategy: Multi-policy discounts

It makes the most financial sense to get a single policy that covers all the vehicles and drivers in the household. It can be customized to your needs so long as you meet the state minimums.Multi-policy discounts are another smart way to reduce your overall payment without forgoing any coverage. You could save 25% by bundling with multiple drivers (or bundling policies for home, auto, and life insurance).Be aware that if two people will be listed on the policy, the company will base its calculation on the highest-risk driver which can raise your overall rates. Jerry can help you compare rates to find the lowest deal you qualify for.MORE: How to find multi-car insurance quotes online

How does the insurance industry work?

You file a claim against your policy so that they issue you a payment for the amount that the repairs cost or for the vehicles fair market value. An insurer is never going to pay you more than your vehicle is actually worth in the eyes of the market when it is totaled.

The result of even minor damages can be a total loss claim simply because the repairs needed would exceed the value of the car.

Since the contract says that the licensed insurer that is covering the property only has to pay up to its actual cash value, it can pose some serious problems when you have dual insurance policies in your own name.

To the provider, it might appear as if you’re trying to profit from your property rather than safeguard it.

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Is It Legal or Not?

Most insurance companies won’t allow multiple policies on the same car because of something called “unjust enrichment.” That’s a fancy insurance term for the idea that you shouldn’t be able to profit from a loss. If your car is worth $10,000 and it’s insured with two companies, you could conceivably get a payout of $20,000 if the car were wrecked and you filed claims with both companies. Although laws may not prohibit double insurance, realizing that kind of gain could be construed as fraud and may subject you to significant penalties.

Reasons to Consider Dual Policies

Despite these disadvantages, having two auto insurance policies isn’t always a bad idea. For example, you might need two policies if you have one vehicle for work and a different vehicle for personal use.

Sometimes, people end up with two auto insurance policies because they think another policy expired or forgot they already purchased insurance with a different company. You might also purchase supplemental coverage, such as roadside assistance, without realizing that your existing auto policy includes this benefit. Read all your policy documents thoroughly so you understand how to use your coverage. Mark expiration and auto-renewal dates on your calendar for all your insurance policies.

If you own a classic car or a luxury car, you may need coverage beyond the standard insurance policy. In this case, it may make the most sense to purchase a separate policy from others in your household from a company that specializes in insuring this type of valuable vehicle. The more expensive a vehicle, the costlier it is to insure because of the potentially high repair and replacement expenses.

You might want to avoid sharing an auto insurance policy with your significant other or spouse if he or she raises your rates. This commonly occurs if one partner has a low credit score or history of auto accidents while the other has good credit and a clean driving record.

Again, read your auto insurance policy carefully. Many insurers have a so-called permissive use clause. This allows you to provide consent for others to drive your vehicle under your insurance coverage. For example, it would cover a significant other who does not live in your residence. Usually, you will have to add someone to your auto insurance if he or she drives your car more than 10 to 15 times a year.

Is It Better to Have Only One Auto Insurance Policy?

When you have two auto insurance policies, you run the risk of violating the policies of your car insurance company. You may also violate a certain clause in your policy. Also, your insurance provider may think that you intend to enrich yourself. If both insurers take this stance, they may refuse to pay your claim in the event of an accident, which can put you and your co-owner in a jam.

To prevent confusion and nonpayment of claims it’s recommended that you and your co-owner insure the vehicle with a single policy. You can have both your names listed on the policy and share the cost.