Can you have two car insurance policies? Most states require you to have at least one auto insurance policy to protects you from financial loss after an accident or claim. While you may think that two insurance policies mean double the payout, that's not actually the case.
Although no laws prohibit you from purchasing two auto policies from two different companies, an insurer will not allow you to purchase two policies on the same car. If you have an auto accident, filing two claims with two different insurance providers constitutes insurance fraud even with two auto policies. This action is known as unjust enrichment.
Disadvantages of Dual Policies
Most experts do not recommend having two insurance policies for the same vehicle. You will have to pay two separate premiums, which is very expensive, for no added benefit. A claim can also become quite complicated in this situation for a few reasons, according to AutoInsurance.org:
- Your two insurance companies will need to agree with one another about who will cover what part of the claim, which can dramatically extend the amount of time it takes for you to receive a settlement.
- Your premium costs from both insurers will rise after a claim.
- You could lose your good driver discount on both policies if applicable.
In addition, each insurance policy may require you to add every driver in your home to your coverage as well as every automobile parked at your household. This can significantly increase your cost of auto insurance. For example, if you live with a significant other, you can save money and follow insurer requirements by sharing a single car insurance policy.
The website Zacks notes that when you renew your vehicle registration, the Department of Motor Vehicles in your state could alert both insurance companies about the dual policies. In this case, one or both providers could cancel your coverage.
Usually, expanding your coverage makes more sense than purchasing two insurance policies. For example, you can exceed your state's requirements for liability insurance and add optional types of coverage like comprehensive, collision, rental car, and roadside assistance.
As mentioned above, filing a claim for the same incident on two overlapping auto policies constitutes fraud. In addition to losing your insurance, you could face felony charges depending on the circ*mstances of your case.
Reasons to Consider Dual Policies
Despite these disadvantages, having two auto insurance policies isn't always a bad idea. For example, you might need two policies if you have one vehicle for work and a different vehicle for personal use.
Sometimes, people end up with two auto insurance policies because they think another policy expired or forgot they already purchased insurance with a different company. You might also purchase supplemental coverage, such as roadside assistance, without realizing that your existing auto policy includes this benefit. Read all your policy documents thoroughly so you understand how to use your coverage. Mark expiration and auto-renewal dates on your calendar for all your insurance policies.
If you own a classic car or a luxury car, you may need coverage beyond the standard insurance policy. In this case, it may make the most sense to purchase a separate policy from others in your household from a company that specializes in insuring this type of valuable vehicle. The more expensive a vehicle, the costlier it is to insure because of the potentially high repair and replacement expenses.
You might want to avoid sharing an auto insurance policy with your significant other or spouse if he or she raises your rates. This commonly occurs if one partner has a low credit score or history of auto accidents while the other has good credit and a clean driving record.
Again, read your auto insurance policy carefully. Many insurers have a so-called permissive use clause. This allows you to provide consent for others to drive your vehicle under your insurance coverage. For example, it would cover a significant other who does not live in your residence. Usually, you will have to add someone to your auto insurance if he or she drives your car more than 10 to 15 times a year.
Benefits of Multipolicy Discounts
Usually, it makes the most financial sense to buy one policy that covers all the drivers and vehicles in your household. Each person can customize his or her own coverage, but you can still take advantage of discounts for bundling your policies. The only requirement is that you buy at least the minimum required insurance coverage in your state so that you can drive legally. With a multipolicy discount, you can often save as much as 25 percent on car insurance.
CarInsurance.com notes that multiple car insurance policies are easy and affordable to purchase. You can often add a driver or vehicle to your policy on the insurer's website or mobile app.
If you are shopping for auto insurance, you will probably find that you save the most money by combining multiple drivers and cars into a single policy. You can search for quotes quickly and conveniently with an online auto insurance comparison tool.
Auto Insurance Rates on Average by State
AutoInsurance.com lists these approximate average auto insurance premium rates by state, from least to most expensive:
- Idaho: $680
- Iowa: $702
- Maine: $704
- Wisconsin: $737
- Indiana: $755
- Vermont: $764
- South Dakota: $766
- North Dakota: $773
- Ohio: $788
- North Carolina: $789
- New Hampshire: $819
- Nebraska: $831
- Virginia: $843
- Wyoming: $847
- Kansas: $863
- Montana: $864
- Alabama: $868
- Tennessee: $871
- Missouri: $872
- Hawaii: $873
- Utah: $873
- Minnesota: $875
- Illinois: $885
- Oregon: $905
- Arkansas: $906
- New Mexico: $938
- Kentucky: $939
- Washington: $969
- Pennsylvania: $971
- South Carolina: $973
- Arizona: $973
- Colorado: $982
- California: $987
- Mississippi: $995
- Oklahoma: $1005
- Countrywide average: $1009
- West Virginia: $1025
- Alaska: $1028
- Georgia: $1048
- Nevada: $1103
- Texas: $1110
- Maryland: $1116
- Massachusetts: $1130
- Connecticut: $1151
- Delaware: $1241
- Florida: $1257
- Rhode Island: $1304
- DC: $1331
- New York: $1361
- Michigan: $1364
- New Jersey: $1383
- Louisiana: $1405
While you usually can't have two auto insurance policies, these numbers provide a ballpark so you can estimate a fair rate in your state.
Sources:
https://www.autoinsurance.org/can-i-have-two-auto-insurance-policies/
https://finance.zacks.com/can-car-two-separate-insurance-policies-two-different-people-10938.html
https://www.carinsurance.com/two-policies-two-cars.aspx#
https://www.caranddriver.com/insurance/
https://www.caranddriver.com/features/g21348995/best-mid-size-luxury-cars-ranked/
