Multi-car insurance policies: What are they and how do they work?

A multi-car insurance policy means that you pay a single consolidated premium to insure more than one vehicle. This not only makes managing your bills easier, but providers generally reward policyholders with a discount for insuring multiple cars under one policy. Determine if a multi-car insurance policy aligns with your needs by exploring eligibility requirements, potential discounts and coverage options available.

What is a multi-car policy?

Most auto insurance companies offer multi-car (or multiple-car) insurance policies. Multi-car policies are available through almost every insurance carrier and, in fact, are not different from a standard auto insurance policy. A multi-car policy simply means that a car insurance policy has more than one vehicle insured. A benefit of insuring multiple cars through a single policy is that most providers give a discount, usually known as a multi-car or multi-vehicle discount, for insuring two or more cars on the same policy.

Each company is likely to have its own requirements for multi-car insurance policies. Some only require that all covered vehicles be located at one address, while other carriers factor in the vehicle owner’s relationship to the policyholder. It never hurts to ask carriers about their specific criteria for multi-car insurance policies. If multiple people live in your household, a multi-driver car insurance policy may apply as well.

What discount can you receive for a multi-car insurance policy?

Each provider’s discount percentage for having a multi-car insurance policy will vary. You’ll most likely need to get a quote to find out the exact discount off your total premium, but here are some that providers advertise:

*According to the carrier at time of publication.

Is there a limit to how many cars I can have on my policy?

Every company is different when it comes to how many cars you can insure on a single policy. Many companies can insure up to four vehicles on one policy before you need a second car insurance policy. Some companies can insure more than four vehicles on one policy.

In general, companies require that you have an ‘insurable interest’ in a vehicle before you can insure it. Insurable interest means that you have a financial interest in the vehicle. An example of this is a vehicle that you co-own. Whether that vehicle is covered and cared for matters to you because you have partial ownership.

If a company allows you to add a car to your policy that you don’t own or co-own, it may require the owner to be a household family member. Additionally, you may need to list that family member as a driver on your policy or as an insurable interest. Your insurance agent should have more specific information on their company guidelines.

Can multi-car insurance policies cover multiple drivers?

It is usually the circumstance that multi-car insurance policies end up covering multiple drivers. Imagine a household with two adults and two teenagers of driving age with three cars to share between them. It’s likely that on any given day, the drivers and cars will be interchangeable. In fact, because of this, car insurance providers generally require all members of your household to be listed on your multi-car insurance policy. This can extend past family members in your household as well, potentially also applying to roommates or domestic partners. Each insurance company has different rules, so you’ll need to discuss this with your agent while constructing your multi-car policy.

How does coverage work on a multi-car insurance policy?

Most states require drivers to carry at least a minimum amount of car insurance coverage. You must meet the minimum coverage requirements to register your vehicle and legally drive.

However, many drivers can benefit from optional coverage, as well. Here are some of the car insurance coverage options that are common for multi-car insurance policies:

• Liability insurance: Liability insurance includes bodily injury and property damage coverage. It pays for the other driver’s losses if you cause an accident and they get injured or their vehicle gets damaged.
• Personal injury protection: Personal injury protection (PIP) is required in many no-fault states. It covers your and your passenger’s medical expenses after an accident, regardless of which driver was responsible.
• Collision insurance: When you cause an accident, collision insurance pays for your vehicle’s repairs. If your car gets totaled, your insurance company will pay your vehicle’s actual cash value determined at the time of loss, minus your deductible.
• Comprehensive insurance: Comprehensive insurance helps cover your vehicle’s repairs if you get involved in a non-collision incident, such as theft, vandalism, an accident with an animal, falling objects or weather-related damage.
• MedPay insurance: Medical payments insurance, or MedPay, provides coverage for your and your passenger’s medical bills if you get injured in an accident. MedPay is available in most states.
• Roadside assistance: Roadside assistance is an endorsement that covers basic car services if you get stranded. Most policies will help pay for things like fuel delivery, flat tire changes, and battery jumpstarts.
• Rental car coverage: If your vehicle gets damaged in a covered loss and needs to get repaired, rental car coverage will pay for a rental vehicle so you can still get around.

Certain coverage on a multi-car policy applies to all vehicles insured, like your bodily injury liability, property damage liability, and PIP/MedPay coverage. But other coverage, like comprehensive and collision, are unique to each vehicle. For example, if you’re insuring a brand-new car and a 15-year-old used car, you could choose to get full coverage on the new car and liability-only coverage on the used car. However, you could also carry the same comprehensive and collision deductibles for all your vehicles, but you are not required to do so by your insurance company.

When would a multi-car insurance policy not be an option?

While a multi-car policy can benefit some drivers, it’s not an option for every scenario. For example, if you want to insure a motorcycle, you must purchase a separate motorcycle insurance policy and cannot add it as a secondary vehicle to your personal auto policy. Even if your insurance provider offers motorcycle insurance, you wouldn’t be allowed to insure your bike on the same policy as your other vehicles.

The same goes for classic cars. If you have a classic car in your garage, you might want to purchase a specialty policy. Classic car insurance offers more tailored coverage for antique or rare older vehicles, such as higher reimbursement limits for repairs and coverage in transport. You generally can’t get these coverage options with a personal car insurance policy.

Another instance where a multi-car insurance policy may be unavailable is if you split your residency between two states. For example, you may store your vehicles in two locations, one at each residence. If that happens, you would have two policies and not be eligible for multi-car discount insurance.

Frequently asked questions

• Which company offers the cheapest multi-car insurance policy?

  The cheapest multi-car insurance company varies from person to person since every driver has a unique set of factors that influence their rates. Plus, drivers can qualify for a number of discounts in addition to a multi-car insurance discount, which can further reduce their insurance premiums. To find the cheapest car insurance company for you, request quotes from several providers and ask about available discounts.

• Can I have multiple car insurance policies?

  Yes, car insurance providers can write individual policies for every car you own, and in some cases, you’ll have to do this if your vehicle doesn’t qualify for a multi-car policy. For instance, if you own a car and a motorcycle, you’ll need a standard auto policy and a separate motorcycle policy. You could also choose to get separate policies if you want different amounts of liability coverage on the insured vehicles, which you can’t choose independently if they’re on a single policy.

• What are stacked insurance limits?

  Stacked insurance can be an added benefit with a multi-car policy. When you have stacked coverage, the true limit of uninsured or underinsured motorist bodily injury coverage depends on the number of vehicles in your household. For instance, let’s say you have $20,000 per person, $40,000 per accident in stacked uninsured motorist bodily injury coverage on your policy, and with two vehicles in your household. This means your true uninsured motorist bodily injury limit is $40,000 per person and $80,000 per accident since 20/40 multiplied by two is 40/80.

• Is it better to have multiple cars on one policy?

  Most drivers find that there are more benefits to putting multiple cars on one policy. Drivers can easily manage their coverage and pay a single car insurance premium instead of several. Plus, the majority of insurance providers offer solid discounts for insuring more than one vehicle. That said, your vehicles might not qualify for a multi-car policy. If you have a standard personal vehicle and a motorcycle, these cannot be insured on the same policy and you probably won’t be able to get the multi-car insurance discount.

• How much does car insurance cost?

  As of August 2024, the average annual cost of car insurance is $2,329 for full coverage and $633 for minimum coverage. However, the quotes you receive may be far higher or well below this average. This is because each insurance company uses its own proprietary algorithm to review factors such as ZIP code, age, driving record and more to evaluate your unique risk profile and charge you an appropriate premium — at least in their eyes. Shopping around and taking advantage of discounts, including multi-car policies, can help you navigate toward a premium price that fits your personal and financial needs.

• Can I add someone who isn’t a family member to my car insurance policy?

  It depends on the eligibility criteria set by your car insurance company. Some providers require that anyone you add to your car insurance policy must be related by marriage, blood or adoption. However, other providers allow non-family members to be added to your policy as long as they share the same residence as you, such as a roommate or domestic partner.