Every vehicle on the road needs to be covered by auto insurance. However, that does not mean that every car needs its own individual insurance policy. In fact, significant savings can be had if you have more than one car and you place them all into one auto insurance policy. This type of insurance is called multi-car insurance.

 

How It Works

Multi-car insurance is placing two or more cars on a single auto insurance policy. The cars must have the same coverage limits for liability and property damage but differing optional coverages for each car is allowed.

 

Having the same liability limits for each vehicle prevents confusion in case of a claim. In addition, if uninsured motorist coverage is elected, it must have the same limits for each car. Typically, vehicles must belong to the same household. There are exceptions however. Depending on the insurer, additional drivers might be required to be related to the primary driver. Optional coverages do not transfer with drivers, but rather are unique to their respective vehicle.

 

Suppose you insure your and your teenager’s car under a multi-car insurance policy, and both of you are listed as drivers. While both cars must have the same liability limits, you have full coverage on your car while your teens car does not. One day, your car breaks down, and repairs will take a week. During that time, you borrow your child’s car. Even though your car has full coverage, that full coverage does not cover your child’s car when you drive it. The full coverage stays with your car, even if it is in the shop. Similarly, if your child borrows your car, your car doesn’t suddenly lose its full coverage status just because your child is driving it.

Again, optional coverage remains with the car for which it was intended, no matter the driver as long as they are listed on the policy.

 

The Advantages of Multi-Car Insurance

Insuring multiple cars on one policy will be less expensive than taking out a separate policy for each car. The savings will be in the form of a discount on the premium of the policy. This discount will typically be anywhere from 10-20%. Also, having a single policy for multiple cars will result in only one insurance card, one monthly payment date, and one renewal date for which to keep track. It is also possible to bundle multi-car insurance with other types of insurance such as homeowners insurance.

 

In North Carolina, one can stack uninsured motorist coverage under a multi-car policy. That means that instead of one buying uninsured coverage for multiple vehicles under a multi-car policy, and having separate limits for each car, one could elect to combine the uninsured limits to one combined total for all the cars. If offered, stacking uninsured motorist coverage will have a slightly higher premium.

 

Example:

Suppose you currently have a multi-car policy covering two cars. Each car has 100k bodily injury and 100k per accident of uninsured motorist coverage. If you choose to stack the uninsured motorist coverage, you will pay more, and both individual coverages will combine into one coverage, resulting in 200k of bodily injury and 200k per accident uninsured motorist coverage for both cars collectively.

 

Limitations on Multi-Car Insurance

Multi-car insurance covers one class of vehicle, passenger cars. One cannot add a different vehicle type that requires its own specialized insurance to a multi-car insurance policy. This includes:

• Motorcycles
• RVs
• Commercial vehicles
• Boats
• Aircraft

All these require non-auto insurance and therefore cannot be added onto a multi-car insurance policy. However, if all the differing types of vehicle insurance policies are done through the same company, it might be possible to get a discount by bundling your policies.

 

Final Thoughts

There are many ways through which one could suddenly find themselves with multiple cars – inheritance, marriage, or having a child become driving age. Each car may individually have an auto insurance policy that is reasonable. In this economy, however, money is tight. It would be smart to explore the options your insurance company has for families with multiple vehicles.

 

Multi-car insurance not only offers significant savings compared to taking out separate auto insurance policies on multiple cars, but also allows some interesting options for optional coverage, most notably being able to stack uninsured motorist coverage.

To learn more about multi-car insurance, contact our team at www.ProtectiveAgency.com or call us at (877) 739-9367. Our licensed insurance agents will be happy to answer any questions you have.