Car Insurance Policies for Multiple Vehicles

By Jessica Bosari
After 13 years in personal and commercial insurance, Jessica Bosari now writes about personal finance, car insurance, risk management and related topics. Since 2008, she has been simplifying complex ideas through engaging articles for her readers.

Car Insurance Policies for Multiple Vehicles

My brother-in-law owns and maintains something like five cars. He doesn’t have human kids, so I guess he’s taken to fathering the mechanical kind. He’s especially attracted to BMWs. My own brother has a Jeep he drives to work, but also keeps a pickup truck for yard work and other random situations where his regular car won’t cut it. Plus, his wife has her own car.

Most families have several cars and drivers in the household. After all, mom, dad and the teen(s) need to get to work and school somehow. Although it would be lovely to pay a single car insurance premium to cover them all, it doesn’t work that way. Anyone household with multiple cars must decide how they will handle the insurance. Let’s consider a few scenarios and discuss your options for car insurance with multiple cars.

The Multi-Car Family

For the typical family, one policy will cover all the cars and drivers in the household. You get a sizable discount for insuring more than one car (around 25 percent for each car), with no ill side effects. It’s true that if one of you has a bad driving record, you’ll all end up paying a higher premium. That increase is generally offset by the multi-vehicle discount, however. Check rates both separately and together to be sure which is the best financial approach to insuring your cars.

Mom, Dad and Teen Driver

Although the overall cost to insure three cars is lower under one policy when one driver is a teen, it may be best to insure the teen separately in order to protect your personal assets if there is a large accident. This is a tough decision that every family must make. If you put the teen on a separate policy, he may not be able to afford the premium himself, and you won’t enjoy the benefit of a multi-car discount to help keep that cost reasonable. You can get more information about the insurance issues related to teen driving here.

More Cars than Drivers

If you’re like my brother-in-law, you might not have all your cars on the road at the same time. He has a car he drives to work every day, a convertible for the sunny days down there in Georgia, and the others that he just likes having around. I’m not certain how he handles his insurance. If he has all five cars active all year, it’s definitely costing him a bundle. He probably keeps just two on the road at a time, but he still has to protect his investment in the cars he’s not driving. For that, he’d be wise to carry active coverage on his primary and secondary cars, while keeping the rest covered on policies with Comprehensive coverage only. That way, a flood or hailstorm isn’t uninsured, but he doesn’t have to pay for full-fledged policies on cars he’s not actively using.

The Extra Utility Vehicle

My brother has a large property, and having the truck makes gathering brush and bringing it down back to the hedge much easier. Occasionally, he might also use it to go crashing through the mud in 4 x 4 mode, plow the driveway in winter, or transport a new appliance back home. He should qualify for two discounts if he insures the truck along with his regular Jeep and his wife’s car. Many insurers offer sizable discounts for utility vehicles, and also offer multi-vehicle discounts.

Multiple Cars and Coverage Limits

Some small but important details about carrying coverage on multiple cars: First, you must carry the same liability limits across the board for all cars. However, you can pick and choose which cars will have optional insurance like physical damage coverage. Although collision and comprehensive deductibles must match for the same car, you can choose different deductibles for each car. You might choose a high deductible on a more expensive car to bring down the rate. And you might choose to drop collision and comprehensive altogether on that beat up old pickup truck you keep for yard work and hauling large items.

Accidents with Multiple Vehicles under the Same Policy

Here’s an ugly scenario: What if you back into your wife’s car? Claims like this can be confusing, and claims adjusters often mishandle them by requiring you to pay a deductible for each car. But depending on the ownership details of the cars, the above scenario should play out in several different ways:

  • The husband and wife each own one of the cars: The wife can make a property damage claim against the husband. She should not have to pay a deductible.
  • The husband and wife are co-owners of both cars: The deductible applies to both cars because the wife cannot make a claim against herself by claiming damage from another car that she partially owns.
  • You both are listed on just one of the cars’ titles: She cannot make a property damage claim. If she is part-owner of your car, she can’t make a claim against herself. If you are part owner of her car, she still can’t make a claim, because she’s making a claim on both your behalves against you, and you can’t place a claim against yourself.
  • Only one of you is titled on both cars: She can’t make a claim for damage because she doesn’t own the car, and you can’t make a claim against yourself.

The bottom line: If each car has different owners on the title, don’t let the insurance company charge you two deductibles. Call your state’s insurance department if you cannot resolve the problem with your insurance company.

Using a single policy to insure multiple cars can be tricky, but it’s often the smartest way to go, because multi-vehicle discounts offer significant savings.