Do I Have to Insure All My Cars with the Same Company? - Assurance IQ (2024)

Do I Have To Insure All My Cars With the Same Company?

While no legal statute requires drivers to insure all their vehicles with a single company, doing so can prevent a fair amount of headache and provide the following benefits:

  • Multi-car discounts
  • One combined monthly premium
  • Streamlined claims process
  • Legal protections

However, people in the same household often must purchase different car insurance policies if:

  • They own a luxury vehicle that requires specialized insurance
  • They have an accident history that could negatively impact other residents’ insurance rates
  • They drive a company or commercial car
  • They recently underwent a divorce and registered their car at a new address

Understanding these discrepancies can help you structure an affordable insurance plan that aptly suits your family’s needs.

Table of Contents

Why Is It Bad To Purchase Separate Policies?

Purchasing multiple car insurance policies presents numerous disadvantages and redundancies.

Double Premiums

Insuring multiple vehicles with different companies requires separate payment schedules, heightening your risk of invoking late penalties. For example, if one bill falls on the 1st of each month and the other occurs on the 10th, you may occasionally lose track of the second payment. By bundling policies, you would only pay a combined premium on a single monthly bill, minimizing the potential for error.

Furthermore, some carriers still require members to list household drivers of separate cars in both policies, jointly raising premium rates. Depending on other family members’ age and driving history, failing to combine your insurance premiums can more than double your monthly dues.

Do I Have to Insure All My Cars with the Same Company? - Assurance IQ (1)

Difficult Claims Process

Working with multiple auto insurance companies can significantly complicate the claims process. Dual claims can eat up time and even delay your payout if one insurance company attempts to recoup money from the other.

Even after one insurer admits financial responsibility, you would likely see both premiums increase after filing a claim. Likewise, you would probably lose your safe driver discount and no-claims bonus on both policies simultaneously.

No Access To Discounts

Insuring two or more vehicles under a single policy usually results in a multi-car discount, lowering combined premiums by as much as 25%. To qualify, insurers typically require that each car share an address, a premium, and a payment date, proving especially useful for married couples, roommates, dependent teen drivers, and other individuals living in the same household.

Conversely, purchasing separate policies would negate your discount eligibility, as competing insurers rarely recognize outside coverage as compliant. Considering that national auto insurance premiums currently average $1,411 annually, missing out on these discounts could cost you hundreds of dollars extra to cover any other vehicle garaged at your residence.

Legal Issues

While securing car insurance through multiple companies is not technically illegal, it puts policyholders at risk of insurance fraud. For example, if you get into a car accident and make duplicate claims with each insurer, a court could find you guilty of attempting to double your payout and impose heavy fines or imprisonment.

Alternatively, forgetting to notify one of the two companies of your accident might lead them to drop coverage or refuse to defend you in a lawsuit. Likewise, some insurance companies do not allow secondary policies on a presently insured vehicle. If one insurance carrier hears of a complimentary plan through the DMV or your financing company, they can immediately cancel your benefits.

When Should You Consider Two Policies?

Despite the many downsides of taking out multiple insurance policies, it occasionally makes sense for divorced couples, owners of expensive cars, and people who drive company vehicles.

Divorces

In addition to the emotional toll of a divorce, recently separated couples undergo the complicated process of financial disentanglement. Once you have moved to a separate residence and a vehicle’s title reflects your sole ownership, most auto insurance companies will not allow you to continue bundling your insurance to take advantage of affiliated discounts.

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Even if you can continue sharing a policy with your former spouse, you may not have ended your relationship on the best terms. Recently divorced couples often forfeit potential savings opportunities in favor of separate policies, allowing them to avoid regular communication and move on with their lives.

Ownership of an Expensive Car

Standard auto insurance companies can withhold coverage for luxury, exotic, or classic cars due to the high cost of parts and repairs or the lack of contemporary safety features like airbags and traction control. These vehicle owners must often purchase individualized protections from special companies, usually for much higher rates than a standard policy.

While you may not need to report accidents in your luxury vehicle to both insurers, marks on your driving record typically increases your risk level in the eyes of all insurance companies. The insurer of your non-luxury car would likely hear about any expensive claims from DMV or police reports and use that information to determine rates during your next policy renewal.

Work Vehicles

People who drive company or commercial vehicles for work often must secure a specialized insurance policy. While standard coverage can apply to limited business use, such as work commutes or small deliveries, it will not cover accidents incurred while transporting goods, employees, or providing business-related services. Commercial insurers often withhold coverage from individuals driving commercial vehicles for recreational use.

Likewise, if you have explicitly purchased and driven a vehicle for business reasons, you can deduct the entire cost of ownership and operation from your taxes. These deductions can include gas, oil, repairs, registration fees, licenses, depreciation, and the total cost of your monthly insurance premiums.

How Much Can You Save With a Multi-Car Discount?

Though rates ultimately depend on your vehicle and insurance company, covering two or more cars under one policy can save money in the following ways:

  • Reduced premiums: Bundling insurance policies together can reduce premiums by as much as 25% per additional vehicle.
  • Single claims deductibles: Some carriers offer a universal deductible for bundled policies, meaning that damaging multiple cars would not result in duplicate deductible fees.
  • Stacking coverage: Combining coverage limits for cars on the same policy increases your financial protection against severe accidents.
  • Tailored benefits: Bundled policies still allow members to customize coverage for each car based on its value, usage, and typical driver (such as a high-risk teen vs. a stay-at-home mother).
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All in All

Multi-vehicle policies typically qualify for significant discounts, offer a convenient means of filing claims, allow for one universal bill payment, and help members avoid insurance fraud. While most people benefit from bundled coverage, recently divorced couples, owners of luxury or classic cars, and commercial vehicle operators often must secure separate policies.

Contact your insurance company with any questions surrounding your coverage options and potential discounts to maximize your savings and benefits potential. If your insurance company will not cover all your cars together, research and compare prices from at least three outside insurers to secure the best affordable coverage on a secondary policy.

Frequently Asked Questions

Can having multiple car insurance policies negatively impact my credit score?

No. However, while there is no direct link between car insurance payments and credit score, failing to pay premiums on either auto insurance policy can trigger the services of a debt collections agency. Debt collection records remain on your credit report for 7-10 years and can negatively impact the cost of future insurance quotes.

Can I transfer my no-claims bonus if I decide to insure my cars with different companies?

It depends. While many auto insurance companies offer annual no-claims bonuses for maintaining a clean driving record, only some will honor discounts provided by a previous insurer or applied to a separate vehicle. Even if they allow it, your new insurance company can reduce the discount percentage or cap eligible savings after a specified amount of claims-free years.

Find an auto insurance policy that meets your needs.

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Find an auto insurance policy that meets your needs.

Get a quote

Do I Have to Insure All My Cars with the Same Company? - Assurance IQ (2024)

FAQs

Do I Have to Insure All My Cars with the Same Company? - Assurance IQ? ›

While no legal statute requires drivers to insure all their vehicles with a single company, doing so can prevent a fair amount of headache and provide the following benefits: Multi-car discounts. One combined monthly premium. Streamlined claims process.

Do I have to insure all my cars with the same company? ›

Although no laws prohibit you from purchasing two auto policies from two different companies, an insurer will not allow you to purchase two policies on the same car. If you have an auto accident, filing two claims with two different insurance providers constitutes insurance fraud even with two auto policies.

Do I have to insure all of my cars? ›

Insurance (also referred to as financial responsibility) is required on all vehicles operated or parked on California roads. You must carry evidence of insurance in your vehicle at all times and it must be provided when: Requested by law enforcement. You are renewing the vehicle registration.

Should I have all my insurance with one company? ›

Whether it's personal assets or professional assets, you have a lot to protect. But that doesn't mean you need to use multiple insurers to do it. In fact, having your home, auto and business policies with one company can help you save – time, money and a whole lot of trouble.

What is the best insurance for multiple cars? ›

For drivers interested in multi-car insurance discounts, we recommend Country Financial, USAA, Erie Insurance, Geico and Nationwide. These providers offer some of the lowest average policy rates for minimum- and full-coverage car insurance as well as numerous discounts, including savings for insuring multiple vehicles.

Can I insure a car that is already insured by someone else? ›

It can be quite complicated to insure a car that's not in your name. Depending on your situation, you have several options. You can add the car owner to your policy as an additional interest, get added to their policy, transfer the car's registration or get added to it or buy a non-owner policy.

Does having multiple cars affect insurance? ›

Adding a second vehicle to your policy will likely increase your premium. However, discounts for a multivehicle policy might offset the cost, making it the most cost-efficient option.

Do my parents have to add me to their car insurance? ›

If you stay at both your parents' homes and you drive their vehicles at each house, even occasionally, they should list you as a driver on each of their individual policies. If you just live with one parent and use their vehicle, then they should list you as a driver on their policy.

How much extra does it cost to insure a second car? ›

While we found that adding a second car to a full-coverage car insurance policy raised rates by an average of $1,185 a year (about $99 a month) for a 72% increase, some companies saw an increase as low as $862 per year while others saw as much as a $1,804 annual increase.

Can someone not on your insurance drive your car Progressive? ›

Even if they don't live with you, they should be added to your policy if they regularly drive your vehicle. A driver who lives in your household and isn't listed on your auto policy may be denied coverage if they borrow your vehicle and are involved in an accident.

Is it smart to bundle insurance? ›

Premium savings

Some insurance bundles can qualify you for discounts on your premiums, making it an easy way to save money. With some providers, the more policies you bundle, the more you save, making it a sensible choice when you have multiple policies to buy.

What are the disadvantages of bundled insurance? ›

Cons of bundling insurance

Unless you comparison shop every year, you could end up paying more than you need to. Another factor to consider is that some insurers start with a higher premium when offering a discount. The premium you end up with may not result in true savings.

Is it cheaper to have separate insurance? ›

If you and your spouse have good driving records and no recent gaps in insurance coverage, you might save more overall by combining policies than by keeping them separate. You could save even more with a multi-car discount if you're insuring multiple vehicles.

Is it cheaper to have two people on the same car insurance? ›

Spouses and their children often save money by being insured on the same auto insurance policy. Your insurance company may require you to add all household members to your policy, even if they don't drive your vehicle.

Is it okay to get multiple car insurance quotes? ›

Getting multiple auto insurance quotes will not impact your credit score. Although most insurers do use credit as a rating factor, companies only run a soft pull on your credit — which does not impact your score.

How much is multi car discount progressive? ›

Progressive Car Insurance Discounts

Multi-policy discount: You can save an average of 5% for bundling Progressive auto insurance coverage with homeowners, renters or another type of insurance. Multi-car discount: This discount of 12% on average is for customers who have more than one car listed on their policy.

Can you have two different car insurance policies in one house? ›

You can get two different insurance policies if you do not share vehicles. However, some insurance companies require you to list all driving-age individuals in your household on your policy, so their driving record might affect your insurance anyway.

Can you have two cars insured in different states? ›

No. A car insurance policy originates in the state where you reside. Buying two auto insurance policies for the same vehicle may result in the company canceling one of them. However, you can have two policies to insure two separate vehicles garaged in different states.

What are the three types of car insurance? ›

The three main types of car insurance are often considered: liability, comprehensive, and collision. This is because liability is required by law in most states, and comprehensive and collision coverage are required for most car loans and leases.

Can you have two insurance policies? ›

There are benefits and drawbacks to having two health insurance plans. A secondary health insurance plan may be able to cover expenses that your primary plan doesn't. Your overall out-of-pocket costs may be reduced if the plans complement each other to help limit your individual responsibilities.

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