Can I have two car insurance policies on one car?

While no law exists that prohibits you from obtaining two auto insurance policies in your name, there are few situations in which it makes sense to do so. If the two policies offer duplicate coverage, having two policies makes even less sense.

If for whatever reason, you are considering buying a second policy, it is helpful to understand in which situations it does and does not make sense to do so.

Situations in Which You May Benefit From Having Two Policies

There are generally few benefits to carrying two auto insurance policies. However, a second policy may be right for you if any of the seven following statements are true:

• You buy a new car.
• You own a luxury vehicle.
• You own two separate cars.
• You purchase a policy for a car that belongs to someone else.
• A high-risk driver lives in your home.
• You receive a loyalty discount from one company.
• You plan to separate or have separated from your partner.

Below we go into more detail on these different scenarios.

Scenario #1 – Buying a Second Policy for a New Vehicle

If you recently purchased a new vehicle from a dealership, the dealer may have offered you temporary coverage to protect you during the time between receiving the keys and insuring the car. If you accept this coverage, make sure that your existing policy does not have a “newly acquired auto clause,” which does more or less the same thing. 

If your policy has such a clause, and if you accept temporary coverage, you will essentially have duplicate coverage, which you want to avoid.

Scenario #2 – Establishing a Separate Policy for a Luxury Vehicle

While most auto insurance companies offer standard coverage for everyday vehicles, some specialize in more niche products, such as luxury vehicle protection. If you own a vintage or luxury vehicle that requires unique protections, it may make sense to purchase a second policy from a luxury auto insurance company.

Scenario #3 – Owning More Than One Vehicle

Every automobile, motorcycle, or RV you own needs its own coverage. While most people carry coverage under the same policy — as many insurers offer discounts and cheaper insurance coverage for a second car — you may decide to purchase entirely separate policies for each vehicle in your possession.

Scenario #4 – Purchasing Coverage on Behalf of Another Driver

If you want to purchase coverage on behalf of another driver, it may make the most sense to add them and their vehicle to your policy. However, you may plan to transfer ownership of the policy to the other driver at some designated time in the future.

For instance, you may want to do this if your teen purchases their own vehicle and you agree to pay for insurance. You purchase the policy and pay the premiums until they graduate from college, at which point you anticipate they will take over payments. In this situation, there may be some benefit to maintaining two separate policies.

Scenario #5 – Purchasing a Separate Policy for a High-Risk Driver

Depending on the level of risk they present, some insurers will flat-out refuse to insure high-risk drivers. If your insurance company refuses to insure a high-risk driver in your home, or if you find cheaper rates for the driver with a second company, you may maintain a separate policy for them.

Scenario #6 – Keeping an Old Policy To Maintain Your Loyalty Discount

Many insurance companies offer loyalty discounts to long-time customers. If yours does, you may have the cheapest rates you can find anywhere. However, the same may not be true for other drivers in your household. If another company offers substantially lower rates to insure your spouse and kids than what your company offers, it may make the most financial sense to keep your old policy while they go onto a new one.

Scenario #7 – Buying a New Policy To Protect Yourself After a Separation

If you and your spouse are in the middle of a separation and have yet to resolve issues pertaining to vehicle ownership and financial responsibility, it may be wise to take steps to protect yourself, just in case. 

This is particularly true if your spouse is the policyholder on your existing policy, as they can stop paying it at any time. If your spouse stops paying the policy, it becomes inactive, which could leave you vulnerable in the event of an accident.

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What is duplicate coverage, and why should you avoid it?

If none of the above seven scenarios apply to your situation, it may make little to no sense to purchase two auto insurance policies. Say, however, that you want to purchase a second policy to receive “double the coverage.” While not technically illegal, there are several reasons why duplicate coverage is a bad idea.

For starters, you cannot receive benefits for the same accident twice, even if they are from separate insurance companies. If you file a claim with both your insurers for the same accident and both companies pay you for the same damages, you’re committing insurance fraud, which is illegal.

Second, because you cannot legally receive double benefits, you waste your money by making double payments. Third, investing in double coverage may violate one or both of your insurance policies. If you violate the terms of either policy, the insurer has the right to cancel your coverage or deny a claim, essentially leaving you with no coverage.

Fourth and finally, if you have double coverage, your insurance companies may argue over who will pay what. Disputes can lead to delayed or unpaid claims.

Invest in One Comprehensive Policy

If your primary goal for investing in duplicate coverage is to receive double the benefits, you would be better off purchasing a single robust policy. Consult with top insurance companies to explore your options and find a policy that is right for you and your insurance goals.

Case Studies: Having Two Car Insurance Policies on One Car

Case Study 1: Temporary Coverage for a New Vehicle

John recently purchased a new vehicle from a dealership. As part of the deal, the dealership offered him temporary coverage until he could secure his own insurance. However, John’s existing policy already had a “newly acquired auto clause” that provides similar coverage for a limited period. Recognizing the duplicate coverage, John decides not to accept the dealership’s offer and avoids unnecessary expenses.

Case Study 2: Specialized Coverage for a Luxury Vehicle

Emily owns a vintage luxury vehicle that requires unique protections. She discovers that certain insurance companies specialize in luxury vehicle coverage. To ensure comprehensive protection for her valuable car, Emily decides to purchase a second policy specifically tailored to luxury vehicles.

Case Study 3: Separate Policies for Multiple Vehicles

Tom has multiple vehicles, including an automobile, a motorcycle, and an RV. While most people carry coverage under a single policy to take advantage of discounts, Tom prefers to maintain separate policies for each vehicle. This allows him to customize coverage and ensure each vehicle has the appropriate level of protection.

Case Study 4: Purchasing Coverage for Another Driver

Sarah wants to provide insurance coverage for her teenage daughter, who recently purchased her own vehicle. Sarah decides to add her daughter and her vehicle to her own policy and agrees to pay the premiums until her daughter graduates from college. This arrangement allows Sarah to maintain control over the insurance and gradually transition it to her daughter’s responsibility.

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