Can You Have Two Car Insurance Policies? Everything You Need To Know

Understanding the benefits of multi-car insurance

One of the biggest advantages of multi-car insurance plans are the associated discounts. Any time you insure more than one car with Nationwide, you’re eligible for a discount. When it comes to the Nationwide Family Plan, any time a vehicle is added to a policy, it increases the discount for that driver and benefits all of the insured drivers on the policy.

How Much Does Car Insurance Cost?

Car insurance shoppers often put the most importance on price. Here are average annual and monthly costs for good drivers.

CompanyAverage annual car insurance cost for good driversAverage monthly car insurance cost for good drivers USAA$1,141$95 Geico$1,182$99 State Farm$1,402$117 Erie$1,419$118 Travelers$1,435$120 Auto-Owners$1,532$128 Nationwide$1,540$128 Progressive$1,892$158 Allstate$2,022$169 Farmers$2,124$177

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Survey Methodology

For the auto insurance knowledge test, a survey of 2,000 U.S. adults was commissioned by Forbes Advisor and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. Data was collected March 23-24, 2022. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR). For a complete survey methodology, including geographic and demographic sample sizes, contact pr@forbesadvisor.com.

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!

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.

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.

How Can I Avoid Purchasing Two Insurance Policies for My Car?

There may be certain instances when you may end up accidentally purchasing two insurance policies for the same vehicle. However, there are some ways to avoid buying four-wheeler insurance from two different companies. These are:

  1. Avoid overlap car insurance by thoroughly examining every detail of your existing four-wheeler insurance policy documents especially during the time of renewal.
  2. Make sure that you are not doubling up your coverage without checking for the breakdown cover. You can also purchase a breakdown add-on cover instead of buying two different policies.
  3. Check your renewal date very carefully to avoid overlapping car insurance policies.
  4. In case you want personal accident cover for people other than drivers, buy an additional passenger add-on cover instead of purchasing two policies.

You May Also Read: One Car Insurance- For Multiple Cars

What does it mean to profit from your property?

You can’t predict when you’re going to have a genuine loss. You could get into an accident tomorrow and never see it coming. You could also leave your home one day and discover that your vehicle has been vandalized.

No matter what the loss is there’s, no way to predict that it’s coming. These are the only types of losses that insurers cover.

Your policy’s purpose is not to help you profit after you have a loss.

You’re not supposed to come out of the situation with more money. The money that you are paid is designed to pay for reasonable repairs.

While you can decide whether or not you actually want to repair your car, you’re supposed to receive the amount of money that’s needed to get the car to its pre-loss condition.

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.

Problems With Too Many Parties

Even though several parties can have insurable interest, it’s not necessary for each interested party to carry his own policy on the car. In fact, doing so could create significant problems when it comes time to collect. Insurance companies are like any other business in that they’re in it to make money. Accordingly, they won’t pay if they don’t have to, and introducing another insurance company into the mix could give them just that opportunity. While they’re busy fighting it out over who is supposed to pay out the claim, you could be left in the lurch. Pretty much any insurance policy can be structured to satisfy the needs of every interested party without having to double insure.

Can The Same Car Have Two Car Insurance Policies On?

You can technically have two car insurance policies on the same vehicle, but it is not recommended. Double-insuring a vehicle may violate the policies of one or both insurance carriers. In addition, if one of your insurance companies finds out that you own another policy on the same vehicle, that company may ask the other company to pay future claims. This could cause your claim payments to be delayed or not paid by either provider.

When it makes sense to consider dual policies

There are some situations, however, where having two policies is a logical thing to do. Maybe you forgot that you had a policy, or you thought that one policy expired. As a result, you purchased supplemental coverage to protect yourself. To avoid this situation, schedule reminders for your auto-renewal dates and keep your documents organized to ensure you understand what’s covered and avoid duplication. Jerry is a smart way to find the right car insurance policy. Plus, Jerry sends you new quotes every time your policy is up for renewal so you always know you’re getting the lowest price.

You have two separate vehicles for different purposes

If you drive one vehicle solely for work and one solely for personal use, then it definitely makes sense to get two separate policies. Whether you work for yourself or someone else, look for an employer policy to keep work things separate from your personal policy.

You own a specialty vehicle

If you own a luxury vehicle or a classic car, then you might need special coverage beyond the basics. In this case, you should get a separate policy for classic car coverage that is not shared with other household members. More expensive vehicles are more costly to insure, so it’s smart to keep this policy separate from your daily usage vehicles and policies.

You and your spouse have very different driving records

If one of you has a lousy driving record—or poor credit—then you may wish to purchase separate auto policies. Keep in mind that every driver who uses the car regularly needs to be officially listed on the policy. Most companies have a ‘permissive use’ clause which means that occasional drivers are covered under your policy. But this does not cover people who live at your address and drive the car frequently.MORE: Should you use a car insurance broker?

What Are the Disadvantages of Double Coverage?

When you own a car with someone, and you each buy auto insurance for that car, double coverage occurs. If you’re both covered under a single policy, there’s nothing to worry about. However, if you purchase a policy from GEICO and your co-owner has a policy with Allstate for the same car, confusion can arise.

According to PocketSense, the problem with having double coverage is that it can be difficult to determine whose insurance company should pay for damages in the event of an accident. If you have double coverage and you rent a vehicle, it’s clear that your car insurance provider will pay for everything if you get involved in an accident. However, if you co-own a vehicle and have two policies, things aren’t so clear-cut.

Under normal circumstances, you’ll file a claim with your insurance company if you meet with an accident. However, if another friend uses the vehicle and gets into an accident, you may not know whose insurer to contact. In another example, say somebody hit your parked vehicle and fled from the scene. What should you do if you and your co-owner are both in the vehicle when the accident happens?

Final Thoughts

Even though buying car insurance from two different companies isn’t illegal, it can result in confusion and excessive premium. Moreover, it is unlawful to file claims from two insurance companies in case of an unexpected event, such as an accident. Therefore, it is recommended to avoid buying double coverage for your car and save yourself from unnecessary hassle.

Is it illegal to have two car insurance policies?

No, it’s not necessarily illegal. You may be able to get two policies for the same vehicle, which is called duplicate coverage. You could get two policies from two companies under your name if you have two vehicles, for example. While it may be allowed under some circumstances, dual policies are not the most cost-effective way to handle car insurance. In most situations, laws and companies do not permit duplicate coverage. It is definitely illegal to file two claims for the same incident with two companies, so proceed carefully.

The Bottom Line

The price of auto insurance is likely to continue to rise in the future. However, there are many things you can do to reduce the sting. These 15 tips should get you driving in the right direction. Remember also to compare the best car insurance companies to find the one that fits your coverage needs and budget.

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