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If you insure multiple cars with the same insurance company, you will likely qualify for a multi-car discount. This type of discount is an excellent way to offset the cost of insuring multiple vehicles.
Multi-Car Insurance Policies: The Basics
A multi-car insurance policy is a policy that covers multiple vehicles that are garaged at the same address. Multi-car policies are pretty popular because they often include a discount. A multi-car policy is often a cheaper option than purchasing separate policies for each household vehicle.
A multi-car discount is simply a discount offered to a driver who insures more than one vehicle with the same insurance provider. Most car insurance companies offer multi-car discounts. Typically, a multi-car discount reduces the costs of liability, collision, and comprehensive coverage by 10 to 25 percent, according to CarInsurance.com. Let’s say that you’re a married driver. If you and your spouse each have a car, and both cars are on the same insurance policy, you’ll qualify for a multi-car discount. You’ll get another discount if you buy your teen driver a car and add it to your policy.
How Much Can You Save With a Multi-Car Discount?
In a survey of the top nine insurance companies in the country, ValuePenguin found that all nine offer a multi-car discount. While some of the companies were only willing to acknowledge that they offer a discount, other companies provided specific percentages. The following are those specific percentages:
- GEICO: Up to 25 percent off
- State Farm: Up to 20 percent off
- Progressive: Up to 10 percent off
- Travelers: Up to 8 percent off
Allstate, Farmers, Liberty Mutual, Nationwide, and USAA were also surveyed but did not specify how much of a discount they give for multiple vehicles.
What Are the Benefits of a Multi-Car Policy?
As Insurance.com points out, there are other benefits, on top of the multi-car discount, of purchasing a multi-car insurance company. These benefits include:
- Coverage Stacking: If you live in a state that allows coverage stacking, you can take advantage of your total amount of coverage in the event of an accident. For example, if you have two cars that each carry $50,000 in uninsured motorist coverage, you can combine that amount for a total of $100,000 in uninsured motorist coverage. While coverage stacking options vary by state, most states allow you to stack uninsured motorist coverage and personal injury protection coverage.
- Streamlined Payments: When you have one policy covering multiple cars, you only have to pay one premium and keep track of one renewal date. While this benefit doesn’t save you money, it does save you time by making your policy more manageable.
- Single Deductible: If you have multiple vehicles that are damaged in the same incident, you only have to pay one deductible if all vehicles are on the same policy. For example, if a tree falls on your garage during a storm and damages both cars, you only have to pay one deductible for your comprehensive insurance to kick in. On the other hand, if the two cars were on separate policies, you would have to pay two separate deductibles.
Insurance.com also notes that some drivers may not benefit from a multi-car discount as much as others. For example, if you have a clean driving record but your spouse doesn’t, you may end up paying more for a multi-car policy because insurance companies charge bad drivers higher rates. Insurance.com suggests that you compare multiple quotes for multi-car and single-car policies to see which policy is more affordable.
How Does a Multi-Car Policy Work?
Multi-car policies are similar to single-car policies in that they provide the same types of coverage, such as liability, collision, and comprehensive. According to The Balance, when you apply for a quote, you’ll provide vehicle information for each car you want to add to the policy and the information for each driver. Some companies will want to know who the primary driver for each car is. When you submit your quote request, the company will automatically apply the multi-car discount, so you can instantly see how much you’ll save.
The Balance also notes that while some coverage applies to every vehicle on the policy, you can select different types of coverage to only apply to specific vehicles. For example, If you add your car, your spouse’s car, and your teen driver’s car to the policy, all three cars will receive liability coverage. However, you can add comprehensive coverage to protect your car only. The following are the types of shared coverage on a multi-car policy:
- Liability
- PIP/MedPay
- Uninsured/underinsured motorist
- Rental reimbursement
Coverage that you set for a specific car includes:
- Comprehensive
- Collision
- Emergency road service
Insurance.com points out that the coverage applies to the car, not the driver. Let’s say your car has collision coverage, but your teen driver’s car doesn’t. If you have to borrow your teen driver’s car and you’re in an accident, your car’s collision coverage will not cover the damage to your teen driver’s car.
How to Add a Second Car to Your Policy
It’s pretty easy to add a second vehicle to your existing insurance policy. As ValuePenguin notes, all you have to do is access your current policy online or call up your insurance agent. Make sure you have the following information on hand:
- The new vehicle’s make, model, and year
- The new vehicle’s vehicle identification number
- The new vehicle’s license plate number
- Your insurance policy number
While adding a second vehicle to your existing policy is the simplest way to get a multi-car discount, you might want to consider shopping around if your household gets a new car. Car insurance companies constantly reformulate how they calculate rates, and if you gather some quotes, you might find that your current policy is more expensive than others. If you decide to gather quotes for a new multi-vehicle policy, you can expedite the process by making sure you have the following information ahead of time:
- Vehicle identification numbers for all vehicles
- Estimated mileage for each vehicle (weekly or yearly, depending on the insurance company)
- Who drives each vehicle the most
- Driver’s license numbers and Social Security numbers for each driver named on the policy
As you can see, there are many benefits to a multi-car insurance policy. By doing a little bit of research, you can find reasonably priced multi-car insurance, take advantage of excellent discounts, and ensure that all of your vehicles have adequate coverage.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
Understanding Multi-Car Insurance Discounts
How Much You Can Save With Multi-Car Auto Insurance
Requirements for a multi-car discount
How Does Car Insurance Deductible Work?
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