Can I have two insurance policies on one car?

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Here's what you need to know...
  • Auto insurance is a requirement in almost all states, but each vehicle registered to be driven on public roads is required to have only one policy
  • In order to insure a vehicle under your name, you need to have some sort of insurable interest in that vehicle
  • Unjust enrichment is a legal term to describe when an insured profits from a loss rather than just recouping their losses


In most states, auto insurance is a requirement. As long as you own a car and that car is registered in your name through a Department of Motor Vehicles, you’ll be required to purchase and maintain an auto insurance policy with basic coverage options.

While a single policy is a must, carrying more than one policy can actually violate the terms and conditions of a standard Personal Auto Policy.

Read on and find out why carrying two or more policies is often prohibited and reasons someone might have more than one policy.

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Why do car insurance companies prohibit two policies on one car?

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It might sound as if an insurance company would have no real interest in how policyholders choose to cover their autos when they buy a secondary plan through an outside carrier.

At first glance, this decision seems harmless, but when you delve in and really understand the repercussions it’s easier to grasp why most Personal Auto Policies have special conditions written into them.

What is the unjust enrichment provision?

The conditions are written into the policy to ensure that auto insurance is used how it’s intended and that policyholders don’t manipulate the product to use it for some type of financial gain.

This is why the unjust enrichment clause can be found in the auto policy form.

Unjust enrichment is a legal term that’s used to describe that an insured party has profited by filing claims on an insured loss instead of being restored to their pre-loss condition.

If there are multiple policies for a single car and there’s a claim, it’s much easier for there to be a double recovery issue, intentional or not. Since this is the main definition of unjust enrichment, having two policies on one car can be risky.

What are the elements of an unjust enrichment claim?

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Just because you have double insurance doesn’t mean that you’re automatically trying to cheat the system. In order for a company to seek restitution for unjust enrichment, certain elements must be met.

Here’s some of the common elements that might signify fraud or deceptive intent:

  • The person must have benefited at the cost of the insurer
  • The person must be aware that they have benefited from the payment of the claim
  • The recipient or policyholder must have retained the benefit even with knowledge of the profits

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What can the insurance company do if you have two policies on one car?

So now that you know how the insurance companies view policyholders who carry multiple policies, you might be curious to learn what might happen if you still decide to pay multiple premiums for one automobile.

Under the best circumstances, the insurer will discover your have double insurance and they will set your policy up for cancellation.

When this happens, you’ll probably be asked to cancel all of your active policies on the car or your policy with the carrier will terminate.

What happens if you have a claim with double insurance?

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In more serious scenarios, where a loss has already occurred, it’s possible that the company could deny or appeal claims claiming that you were deceptive.

This could delay the claims process, prevent collection, or lead to retention claims for unjust enrichment after you’ve already collected a claims settlement as a remedy. This could cost you in time and in legal fees.

Which policy will pay if you have two in your own name?

What makes double insurance so complicated when it’s under the same name is that it’s difficult to decide which insurance company is responsible for paying a loss.

Insurance companies are a business and their mission is to pay out as little as possible while still fulfilling their obligations under the insurance contract.

The companies are each responsible for paying out the limits listed on the policy, but there must be an agreement as to which company will pay first.

This is why there’s a structure called a coordination of benefits to determine which company will make the initial payment.

Can a vehicle be insured by two different people?

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You might understand the rules around insuring a car with two policies under your name, but what if the policy is purchased by another party?

While the same rules typically apply when insuring the same car, when the policies are under two different names the situation is not as easy to monitor.

It may be allowed in some states, but still, only one policyholder can collect for an insured loss.

What is insurable interest and why does it matter?

Not just anyone can go out and buy insurance on a car. In order for someone to buy insurance on a vehicle in their name, they must have insurable interest in that car.

This means that the person must have the potential of suffering financial loss if something were to happen to the vehicle.

If there wouldn’t be a financial impact on the person, they shouldn’t buy a policy on the car.

Scenarios Where Double Insurance May be Acceptable

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There are only a few scenarios where it’s wise to buy two policies on one car. If a married couple is going through a divorce, each party might insure their vehicles until the marriage is officially dissolved.

Some parents buy separate policies on a vehicle their child drives to avoid rate hikes for other household cars.

Just be sure to check with the insurer before assuming they allow the double insurance before you have a claim.

If you’re not happy with the premiums that you’re paying, it’s time to start price shopping.

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