Multi-Car Insurance Policies: What Are They and How Do They Work?

A multi-car insurance policy means that you pay a single premium to insure more than one vehicle. This not only makes managing your bills easier, but providers generally reward policyholders with a discount for insuring multiple cars under one policy. Determine if a multi-car insurance policy aligns with your needs by exploring eligibility requirements, potential discounts and coverage options available.

What is a multi-car policy?

Most auto insurance companies offer multi-car (or multiple-car) insurance policies. Multi-car policies are available through almost every insurance carrier and, in fact, are not different from a standard auto insurance policy. A multi-car policy simply means that a car insurance policy has more than one vehicle insured — think of it like a bundled policy for multiple cars. A benefit of insuring multiple cars through a single policy is that most providers give a discount, usually known as a multi-car or multi-vehicle discount, for insuring two or more cars on the same policy.

Each company is likely to have its own requirements for multi-car insurance policies. Some only require that all covered vehicles be located at one address, while other carriers factor in the vehicle owner’s relationship to the policyholder. It never hurts to ask carriers about their specific criteria for multi-car insurance policies. If multiple people live in your household, a multi-driver car insurance policy may apply as well.

What discount can you receive for a multi-car insurance policy?

Each provider’s discount percentage for having a multi-car insurance policy will vary. You’ll most likely need to get a quote to find out the exact discount off your total premium, but here are some that providers advertise:

*According to the carrier at time of publication.

Is there a limit to how many cars I can have on my policy?

Every company is different when it comes to how many cars you can insure on a single policy. Many companies can insure up to four vehicles on one policy before you need a second car insurance policy. Some companies can insure more than four vehicles on one policy.

In general, companies require that you have an ‘insurable interest’ in a vehicle before you can insure it. Insurable interest means that you have a financial interest in the vehicle. An example of this is a vehicle that you co-own. Whether that vehicle is covered and cared for matters to you because you have partial ownership.

If a company allows you to add a car to your policy that you don’t own or co-own, it may require the owner to be a household family member. Additionally, you may need to list that family member as a driver on your policy or as an insurable interest. Your insurance agent should have more specific information on their company guidelines.

Can multi-car insurance policies cover multiple drivers?

Most of the time, multi-car insurance policies end up covering multiple drivers. Imagine a household with two adults and two teenagers of driving age with three cars to share between them. It’s likely that on any given day; the drivers and cars will be interchangeable. In fact, because of this, car insurance providers generally require all members of your household to be listed on your multi-car insurance policy. This can extend beyond family members in your household as well, potentially also applying to roommates or domestic partners. Each insurance company has different rules, so you’ll need to discuss this with your agent while constructing your multi-car policy.

How does coverage work on a multi-car insurance policy?

Exactly how the policy specifics work will depend on your insurer. However, most of the time, you must maintain the same liability and underinsured/uninsured motorist coverage across multiple vehicles. You typically can’t have ultra-high liability coverage on one vehicle and another insured at minimum coverage. In some states, if you have multiple cars with underinsured/uninsured motorist coverage, you may able to “stack” them together for higher limits. So, if you have two vehicles each with $25,000 in underinsured/uninsured motorist bodily injury liability coverage, your policy may allow you have up to $50,000 for one accident. But, coverage stacking isn’t permitted in every state, and your insurer may let you do it even if it’s allowed in your state. 

Although liability limits are usually consistent across multiple vehicles, most insurance companies allow you to pick and choose when it comes to comprehensive and collision coverage. These are optional add-ons that can help pay for your vehicle’s repairs after an accident you cause, along with other things like vehicle theft and weather damage. When you have comprehensive and collision coverage on top of liability coverage, it’s usually called a full coverage policy.  

Your deductible represents the amount you are financially responsible for when you file certain types of claims. When you insure multiple vehicles on one policy, it’s possible that your insurer will offer you one deductible for the entire policy. Or, each vehicle will have its own deductible. Comprehensive and collision insurance typically have their own deductibles. Like your regular deductible, these may apply to each individual vehicle or to the entire policy. 

When would a multi-car insurance policy not be an option?

While a multi-car policy can benefit some drivers, it’s not an option for every scenario. For example, if you want to insure a motorcycle, you must purchase a separate motorcycle insurance policy and cannot add it as a secondary vehicle to your personal auto policy. Even if your insurance provider offers motorcycle insurance, you wouldn’t be allowed to insure your bike on the same policy as your other vehicles.

The same goes for classic cars. If you have a classic car in your garage, you might want to purchase a specialty policy. Classic car insurance offers more tailored coverage for antique or rare older vehicles, such as higher reimbursement limits for repairs and coverage in transport. You generally can’t get these coverage options with a personal car insurance policy.

Another instance where a multi-car insurance policy may be unavailable is if you split your residency between two states. For example, you may store your vehicles in two locations, one at each residence. If that happens, you would have two policies and not be eligible for multi-car discount insurance.

Frequently asked questions

• Which company offers the cheapest multi-car insurance policy?
  

  The cheapest multi-car insurance company varies from person to person since every driver has a unique set of factors that influence their rates. Plus, drivers can qualify for a number of discounts in addition to a multi-car insurance discount, which can further reduce their insurance premiums. To find the cheapest car insurance company for you, request quotes from several providers and ask about available discounts.

• Can I have multiple car insurance policies?
  

  Yes, car insurance providers can write individual policies for every car you own, and in some cases, you’ll have to do this if your vehicle doesn’t qualify for a multi-car policy. For instance, if you own a car and a motorcycle, you’ll need a standard auto policy and a separate motorcycle policy. You could also choose to get separate policies if you want different amounts of liability coverage on the insured vehicles, which you can’t choose independently if they’re on a single policy.

• What are stacked insurance limits?
  

  Stacked insurance can be an added benefit with a multi-car policy. When you have stacked coverage, the true limit of uninsured or underinsured motorist bodily injury coverage depends on the number of vehicles in your household. For instance, let’s say you have $20,000 per person, $40,000 per accident in stacked uninsured motorist bodily injury coverage on your policy, and with two vehicles in your household. This means your true uninsured motorist bodily injury limit is $40,000 per person and $80,000 per accident since 20/40 multiplied by two is 40/80.

• Is it better to have multiple cars on one policy?
  

  Most drivers find that there are more benefits to putting multiple cars on one policy. Drivers can easily manage their coverage and pay a single car insurance premium instead of several. Plus, the majority of insurance providers offer solid discounts for insuring more than one vehicle. That said, your vehicles might not qualify for a multi-car policy. If you have a standard personal vehicle and a motorcycle, these cannot be insured on the same policy and you probably won’t be able to get the multi-car insurance discount.

• Can I add someone who isn’t a family member to my car insurance policy?
  

  It depends on the eligibility criteria set by your car insurance company. Some providers require that anyone you add to your car insurance policy must be related by marriage, blood or adoption. However, other providers allow non-family members to be added to your policy as long as they share the same residence as you, such as a roommate or domestic partner.