Insurance companies often make it cheaper to insure multiple vehicles on the same car insurance policy than it is to insure them individually. If the vehicles in your household are on separate policies, here’s what you should know about saving money with a multicar discount.
In this article:
How does a multicar insurance policy work?
With a multicar insurance policy, your policy-level coverages, such as liability, extend to all vehicles on the policy, while vehicle-specific coverages, including collision and comprehensive, can be different for each car.
The following coverages are usually offered on a policy level, though not all are available in every state:
- Uninsured and underinsured motorist (UM/UIM)
- Personal injury protection (PIP)
- Medical payments (MedPay)
The following coverages are usually offered on a vehicle-specific basis. The availability of these and other vehicle-specific coverages vary by state and insurance company.
- Roadside assistance and towing
- Rental car reimbursement
- Guaranteed asset protection (GAP)
If, for example, you have a new car and an older, low-value car, you could pay for collision and comprehensive coverage on the new car but not the older one. In most states, the policy level coverages will apply equally to both vehicles, regardless of the vehicle-specific coverages you choose.
However, in some states, you can “stack” your bodily injury limits for UM and UIM coverage. If you have two cars on a policy with $25,000 limits for UM bodily injury, you could stack these limits. Doing so would give you up to $50,000 for medical treatment stemming from an accident caused by an uninsured motorist.
A multicar discount should not be confused with a multipolicy discount. The latter allows you to save by bundling your car insurance with a home or renters policy, or any other coverage, with the same company.
You usually can’t add a motorcycle, motor home or commercial vehicle to your personal auto insurance policy for the multicar discount. You can, however, often score a multipolicy discount by insuring these items with the company that insures you car.
How do I qualify for a multicar discount?
If you are single and own multiple cars, all you have to do is provide the vehicle identification number (VIN) of each vehicle to your insurance company. Most insurance companies automatically apply the multicar discount, but you should check your quote, declaration page or billing statement to make sure it’s there.
If you are married, your insurance company probably already includes you and your spouse on the same policy, along with all your vehicles, whether you own them individually or jointly. It is also easy to add your newly licensed teen to your policy, along with the car they drive.
If your adult children have moved back home or you live with other family members, consolidating the coverage for all of your vehicles in a single policy might reduce your combined premiums. The same could also be true if you live with your significant other or have roommates.
What are the advantages of a multicar insurance policy?
In addition to getting a multicar discount, putting all the drivers and vehicles in your household on the same policy covers each driver in any household member’s vehicle.
This could take a lot of stress out of the claims process if anyone in your household gets into an accident while driving another household member’s car.
Another advantage of insuring multiple cars on the same policy is getting a single billing statement for all the cars in your home. Even if you’re splitting the costs with others, insurance companies typically itemize the costs of coverage for each car on your billing statement. This makes it relatively easy to figure out how much each person owes.
The best way to see if multicar discounts can save your household money is to compare quotes for a single policy to those showing the costs of separate policies.
When is the multicar discount not worth it?
If any of the other drivers on your policy has a poor driving record or bad credit, the savings you get from a multicar discount might not be worth it.
Insurance companies evaluate the risk factors of all the drivers on a policy when they determine your rate. A driver who poses a greater insurance risk, such as someone with tickets, accidents or bad credit, will raise the rate for everyone else on the policy, including those with spotless records.
Since teens are considered the riskiest drivers to insure, parents usually see a spike in their car insurance rates when they add a child to their policy. On the flip side, teens tend to get better rates on a parent’s policy than they do on their own. This usually ends up providing a family with a net savings.
In some cases, it makes sense to exclude an individual in your household with a bad driving record from your policy to prevent them from having a negative impact on your rate. Just don’t let an excluded driver borrow your car, because your insurance company probably won’t cover damages or injuries they cause in an accident.
Which companies offer the best multicar insurance discounts?
The benefits and restrictions on multicar discounts vary by insurance company. Here are highlights of the multicar discounts available from three leading carriers.
GEICO’s multivehicle discount allows you to save you up to 25% on most coverages.
Progressive customers with two or more vehicles on the same policy save an average of 4%. The vehicles can belong to your spouse, any family member, a roommate or anyone else living in your household.
State Farm’s multicar discount requires all the cars in your household to be owned by related individuals for you to save up to 20%. You can qualify even if the cars are insured on separate State Farm policies.
Can I get a multicar discount for a collectible or stored vehicle?
Collectible cars and stored vehicles usually don’t qualify for a multicar discount for the following reasons.
Collectible cars: If you have a classic, vintage or antique vehicle, you’re usually better off insuring it with a specialized collectible-car policy. These policies typically tailor coverage to the unique insurance needs of a restored vehicle. Some insurance companies give you a multipolicy discount for insuring your collectible car with them or their specialty car insurance partner.
Stored vehicles: If you have a car that you only drive on a seasonal basis, or don’t drive at all, you can often get comprehensive-only coverage at a reasonable price. This will cover damage from any cause other than a collision, such as a fire, a falling tree or vandalism. However, insurance companies don’t always extend a multicar discount to a vehicle covered in this manner. Some states require you to turn in your license plates when you remove liability coverage from a stored vehicle.
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