What is multi-car insurance?

Multicar insurance extends coverage to two or more vehicles on the same policy and is often cheaper than buying separate policies for each car – up to 25% cheaper in some cases. For many people, it also means less hassle.

"Usually, anytime you live in a household with immediate family or a partner and [have] more than one car, a multi-car policy is going to cost less and be less complicated than multiple single car policies," said Kate Terry, an insurance agent and chief executive officer (CEO) of Surround Insurance, based in Cambridge, Massachusetts.

There are a few things to remember about multi-car insurance. First, you cannot insure just any vehicle. It must be driven by a family member who resides at the same address as the policyholder, although some insurers allow exceptions to this.

Second, the number of cars you can insure on the same policy is limited. Most carriers cap the number at four vehicles. Finally, there are some instances when having separate car insurance policies may be the better idea.

Key highlights

• Insuring two or more vehicles can save up to 25% on your car insurance premium.
• All vehicles must be owned and driven by immediate family members who share the same address
• Some insurers allow you to choose different auto insurance coverage levels for each vehicle you insure

How does multi-car insurance work?

Car insurance works the same way regardless of whether your policy covers one vehicle or several. In exchange for paying your premium on time, your insurer will provide financial protection in case of a covered loss, such as a collision or theft, up to your coverage limits and minus any deductible you may owe.

Typically, you can insure up to four vehicles on a single insurance policy, although that number varies among carriers. In many cases, you can buy different coverage amounts for each vehicle you insure. For instance, if you own a 2-year-old Honda Accord and a 10-year-old Toyota Corolla, you may want full coverage for the Accord but only liability for the Prius.

As with all auto insurance, premiums are based on a number of personal factors, including age, gender, occupation, miles driven, type of vehicle, and so on. And each person who is named as a driver on your policy will have an influence on the total premium. For example, adding a teenage driver to your car insurance will raise your total rate more than adding an older adult, such as a spouse, because teen drivers are considered riskier to insure.

There may be instances where multicar insurance is not your best bet. For example, if you own a classic or rare automobile or a luxury or sports car, it may be cheaper to insure that vehicle on a separate policy. Talk with your insurance agent about finding the best coverage options.

Types of multi-car insurance

• Liability insurance is mandatory in all states except New Hampshire. There are two parts to liability coverage: bodily injury and property damage. These pay for damages or injuries you cause to another driver, their passengers or to their vehicle. Typically, coverage limits are denoted with three numbers, such as 50/100/50. Those numbers mean:
  • $50,000 for injuries per person
  • $100,000 for injuries per incident
  • $50,000 for property damage per incident
• Collision insurance pays for repairs or replacement of your vehicle after an at-fault accident. The maximum coverage limit is usually your vehicle's value, and this is subject to a deductible, which is the amount of money you must pay before your insurance kicks in.
• Comprehensive insurance is another optional form of insurance. It pays for repairs to your vehicle from incidents other than collisions, such as damage from severe weather or theft. As with collision insurance, the maximum limit for comprehensive protection is typically your car's value.
• Uninsured/underinsured motorist (UM/UI): Uninsured or underinsured protection is an optional type of insurance that helps pay for repairs to your vehicle if you're in an accident and the other driver doesn't have insurance — or has too little coverage — to cover the bill.
• Personal injury protection (PIP): Required in a handful of “no-fault” states, this insurance covers medical costs for yourself and your passengers, regardless of who caused the accident.

Medical payments (MedPay): This provides financial coverage for medical costs and related expenses for you and your passengers, regardless of fault. Coverage levels are lower than PIP insurance. MedPay insurance is optional in several states but only

Frequently asked questions

What are some common discounts for multi-car insurance?

With a multi-car discount, you may be able to reduce your premiums by 10% to 25%.

"If you think about it, the insurance company saves a little on expenses if they write a two-car policy versus two one-car policies: just one bill, one set of paperwork," said Terry. "In general, drivers like that, [that live in multi-car households] tend to have a lower risk of claims, probably related to lifestyle issues. That savings gets passed on to you."

However, you may qualify for additional discounts, such as:

• Multi-policy. If you bundle your car insurance policy with other forms of insurance, such as homeowners insurance, you may be eligible for a discount of up to 25%.
• Good student. If you have a teen or young adult driver in high school or college who maintains a specific grade point average, they may qualify for a discount of as much as 10% or more on your premium
• Low mileage: If you drive fewer than 8,000 to 10,000 miles per year, which is less than the national average, you may qualify for a low mileage discount of anywhere from 3% to 8%. You may also find that a pay-per-mile policy, where you’re charged a monthly base rate plus a per-mile fee, is more economical.
• Professional affiliations. Many professional organizations have deals with insurers for discounted rates, and carriers often tout savings of 10% or more for people who work in the public-service sector, such as teachers, police and other first responders.
• Driving course completion. A clean driving record is the best way to maintain low rates, but even the best drivers can stand to brush up on their skills. Most carriers will discount your premium for taking an online defensive driving course.

"[One of the] ways to save on premiums where vehicles have collision and comprehensive coverage is to take a defensive driving course," said Colleen Parsons, an independent insurance broker with World Insurance Associates. "There are so many online options to choose from these days. The discount is a little less than 10% per vehicle premium and the discount is good for three years."

How do I get a quote for multi-car insurance?

Getting a quote for a multi-vehicle policy is similar to requesting quotes for a single vehicle. You can complete the process in a few steps:

• Shop around. Most insurers allow you to get auto insurance quotes online through their websites. Make a shortlist of insurers or use a comparison shopping site to compare available policies and rates.
• Enter your personal information. You'll need the driver's license number of each driver you intend to insure, the make, model and year — or the vehicle identification number (VIN) of each car — and your estimated monthly mileage.
• Adjust coverage limits. You can adjust your coverage limits to tailor the quotes to your needs. For example, you can increase the liability coverage maximum, or add benefits like roadside assistance to your policy. You can also select a deductible amount; most insurers offer deductibles ranging from $0 to $2,500.
• Compare your options. When comparing quotes, ensure that the coverage limits, optional add-ons and deductible amounts are the same as for your current policy to make sure you’re making an apples-to-apples comparison.
• Buy your new policy. Some carriers allow you to complete the entire application and purchase policy online, while others require you to work with a local agent to complete the process. Either way, make sure your new car insurance policy is in effect before cancelling your old one. If you have a loan or lease, be sure to notify your lender, too.