If you live in a home with multiple cars, you could purchase an auto insurance policy for each one. But typically it’s more convenient—and cheaper—to insure all the vehicles under a multi-car insurance policy.
This type of auto insurance coverage allows you to purchase a single policy to cover multiple vehicles. Many car insurance companies offer multi-car insurance discounts of up to 25% or more. There can be limitations though, such as a limit to the number of cars you can have on one policy, making it crucial to know how a multi-policy car insurance policy works.
How Does a Multi-Car Insurance Policy Work?
A multi-car insurance policy works by insuring two or more cars on one car insurance policy. This situation is most likely in a family that has two or more cars all garaged at a single location.
Setting up a multi-car insurance policy is as simple as letting the car insurance company know you have multiple cars in your household that you want to place on the same auto insurance policy.
With a multi-car insurance policy, some types of coverage—such as liability car insurance and uninsured motorist coverage—will be the same across every vehicle insured under the policy. This means the same limits are set for each car.
In other cases, such as with collision and comprehensive coverage, you might be able to mix and match coverage on a vehicle-by-vehicle basis.You can customize this coverage by car, so if you have a new car you can have comprehensive and collision insurance on it while skipping those coverages on an older car.
One big advantage of multi-car insurance is that you often will earn a discount with this type of policy. Insurance companies typically offer price breaks to policyholders who insure multiple cars under one policy.
Requirements for Getting Car Insurance on Multiple Vehicles
The main requirement when getting car insurance for multiple vehicles is typically that all the cars on the multi-car insurance policy are kept at a single address and owned by family members within the household.
One exception to this rule is when a student attending college temporarily lives away from home. Car insurance companies normally allow the student’s vehicle to remain on the family multi-car policy in this situation, but don’t assume that will be the case. Consult with your insurance company to find out whether that option is available.
Car Insurance Companies That Offer Multi-Car Discounts
Many car insurance companies offer discounts to households that insure multiple cars under one policy.
Examples of Multi-Car Discounts
How Many Vehicles Can I Insure on One Policy?
The number of vehicles you can put on one car insurance policy varies by insurer but the typical limit is four or five cars.
You must insure at least two cars on a single policy in order to get a multi-car discount, but car insurance companies can limit the number of cars you can insure on a multi-car policy. For example, American Family covers up to five cars, while Lemonade allows up to four.
Benefits of Insuring Multiple Cars on One Policy
There are several benefits of insuring multiple cars on one policy, including:
- Savings. You often get a discounted rate compared to what you would pay for a single policy. For example, you might save up to 25% or even more.
- Convenience. You have less paperwork with just one policy. In addition, your household will have one bill, with coverage of all the cars in your household renewing at the same time.
- Better coverage. Some of the savings you gain from purchasing multi-car insurance can be used to buy more robust coverage than you otherwise could afford.
- Lower deductible costs. Some companies have one deductible for all your vehicles when you purchase a multi-car insurance policy. That means that if two of your vehicles are damaged in one event, such as in a storm, you’ll only have to pay one deductible for both cars.
- Stacking. Some states allow policyholders to “stack” uninsured motorist coverage. This means you can apply your coverage to each of the cars you insure, thus doubling (for two cars) or tripling (for three cars) your overall uninsured motorist coverage.
Is Insuring Multiple Cars Under One Policy Ever a Bad Idea?
While purchasing multi-car insurance is a great option for many people, it might not be the right choice for everyone. For example, if you own two vehicles and use one for business, it’s best not to use the same policy to cover both vehicles. You instead want to purchase a commercial auto insurance policy for the business vehicle.
A multi-car policy might also end up being more costly if someone in your household has an extremely expensive car that costs more to insure.
There can additionally be problems if you’re splitting a policy and a roommate, significant other or another person who doesn’t live up to their end of the bargain by paying their share of the insurance.
