You can save on your coverage if you have more than one vehicle to insure. Multi-car discounts are easy to qualify for and can trim up to 25% of your car insurance rate, though how much less you pay depends on your insurance company.
Keep reading to learn everything you need to know about a multi-car discount.
What is a multi-car discount?
It is a discount offered by most insurance companies to policyholders who insure more than one vehicle. Almost all car insurance companies will offer a multi-vehicle discount once you insure more than one automobile on your car insurance policy with the insurer. On average, the multi-car discount is between 10% to 25% off each vehicle’s liability, collision, and comprehensive portions.
So, if you have one car on your policy already and you’re buying a weekend car for yourself or a car for your newly licensed teen to drive and add the vehicle to your current auto insurance policy, then you would normally get a multi-car discount applied to each vehicle’s premiums.
How much is a multi-car discount?
The answer varies by insurer but in general, you should shave 10% to 25% percent off of your premium when adding a vehicle to an existing insurance policy. When shopping for a new policy, get premium quotes from at least three insurers to find the best rate.
You should always be aware that a big discount percentage doesn’t always result in a lower overall rate. That’s because the base rate of policies differ from one insurer to the next. So, for example, if one carrier’s rate is $800 for coverage, and offers a 20% multi-car discount, you pay $640. But if you get just a 10% discount on a policy of $600, you pay $540, so it’s a lower discount amount but you still pay a lower rate overall.
Do the discounts stack?
A multi car insurance discount doesn’t compound as you add more vehicles to your policy. This means that your first car doesn’t go from a 10% discount to a 20% discount if you add more cars to the policy. Instead, if you have three cars on your policy, each may get 10% off its portion of the premium.
Do I have to carry the same coverage on each vehicle?
Most insurers require that your liability, uninsured motorist and other state-required coverage limits be the same on all vehicles. As an example, if you are carrying liability limits of 100/300/50 on your first car, you will need to have the same limits on any other vehicles. They do this so there is no confusion regarding your liability limits if you’re in an accident.
Collision and comprehensive come with more flexibility. In most cases, you can have collision and comprehensive on one vehicle but not carry it on another. This is also true for other coverages such as rental reimbursement or custom car coverage.
What information do I need to add vehicles to my policy?
When adding a car to insurance or a new driver, you will need to give your insurance company the following information:
- Make, model, and year of the vehicles you are adding
- Vehicle identification number (VIN)
- Odometer reading
- The name, date of birth, and driver’s license numbers of the drivers to be listed on the policy
How to shop for a multi-car policy
Once you have narrowed it down to a few policies, it’s time to do some research on the insurers. Here are just a few things you may want to check out before signing on the dotted line:
- Verify the insurance company is licensed to write policies in your state.
- Is the insurer in a strong financial position? Do they have the resources to pay all of their claims?
- Read reviews and look for comments on their claim process and customer service. If there are numerous complaints for the same thing, consider another insurer.
- Look at sites such as the Better Business Bureau to check out complaints and their rating as a business. You can also check AM Best, Fitch, Kroll Bond Rating Agency (KBRA), Moody’s and Standard & Poor’s.
If the company you are considering has numerous complaints or a rating lower than B with the BBB, you should move on to a different insurance company.
After you have conducted your due diligence, the only thing left to do is make a final decision and purchase a policy.
FAQ
Can you add a car to your insurance policy online?
While the answer to this varies by insurance company, in most cases, you will be able to add a vehicle to your policy online. You will still need to provide the required information mentioned above such as the details of the car(s) and drivers you are adding. It is always a good idea to check in with your agent when adding a vehicle to your policy to ensure you are getting all the discounts available.
Can I get a home and auto insurance bundle discount?
When you contact your agent to add a new car or move to a new insurance company it is always a good idea to make sure you are getting a bundling discount if you also insure your home with the same insurer
Some insurers do cap the number of discounts you can have applied to your policy. Most car insurance companies however will allow you to have both a multi-car discount and a home and auto insurance bundle discount.
Are cars located out of state eligible?
In most cases, your cars should be insured in the state where they are kept.
As an example, if you have a second home in Arizona that has an Arizona title and plate, it has to be insured by a company that is licensed to write policies in Arizona. If your main house is located in Colorado, any cars there must be insured by an auto insurer licensed in Colorado.
Can a child away at school still be on a multi-car policy?
Like many scenarios with a multi-car discount, it depends on your insurer. If your child is attending college in your home state and takes a car with her, in most cases, you can keep her on your insurance policy as long as your home address is considered her primary residence.
On the other hand, if your child has finished college or just moved out on their own, your insurer will probably want your child to get their own policy and drop off of yours.
Do multi-car policies come with a single deductible?
Yes. If more than one of your vehicles is damaged in the same incident, you will only have to pay one deductible. For example, a windstorm knocks a tree onto your garage, damaging both cars. When you have a multi-car discount, you only have to pay one deductible to fix both vehicles. This is only true if both cars were damaged due to the same incident.
Do multi-car policies have one renewal date?
Yes. When you put all of your vehicles on one policy, you only have to deal with one renewal date and one payment date. If you have separate policies for each vehicle, you not only miss out on the discount but also have to deal with multiple bills and due dates each month.
Is a multi-car discount ever a bad idea?
While a multi-car discount can be an excellent idea in most cases, there are situations where it may result in a higher premium. If you try to add a driver that has a less-than-stellar driving record or cruises a vehicle that is much more luxurious than yours (think Audi while you drive a Ford) you could end up paying more than you would for just your own policy.
Insurers consider a number of factors when setting a premium and your driving record and the type of car you drive are big ones. The best advice is to get a number of multi car insurance quotes for both you and your roommate and then compare them to policies that keep your vehicles separate.
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