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How to insure more than one car

Chris Kissell

Do you have more than one car to insure? If you live in Kentucky, chances are good the answer is “yes.”

About 28 percent of households in the Bluegrass State that shop for car insurance report owning more than one car, according to an analysis of car insurance quotes requested by our online shoppers.

The top 10 states with the highest percentage of multicar households among online shoppers are:

·         Kentucky: 28.2 percent.

·         West Virginia: 22.9 percent.

·         Montana: 22.7 percent.

·         South Carolina: 22.3 percent.

·         New Mexico: 21.9 percent.

·         Vermont: 21.7 percent.

·         North Carolina: 21.5 percent.

·         Connecticut: 21.4 percent.

·         North Dakota: 21.1 percent.

·         South Dakota: 20.8 percent.

If you need to insure a second car, you may worry that adding the extra vehicle to your policy will cause your annual car insurance costs to double.  

But with most insurers, adding a car to your policy actually qualifies you for a discount. This practice is widespread in the insurance industry.

For example, multicar discounts from 21st Century Insurance can save you up to 30 percent, while insuring more than one car with GEICO could result in a 25 percent discount. State Farm and Nationwide offer discounts of up to 20 percent.

Why do insurers offer you the break? Randy Termeer, vice president of countrywide product management for The Hartford, says it’s “because you’re spreading the insurance risk across vehicles.”


Do you qualify?

Car insurance companies set their own rules regarding who can add their car onto your policy and qualify for multicar discounts. Spouses and blood relatives, such as children, often are eligible.

However, some insurance pioneers now extend eligibility to couples in less traditional situations. For example, Esurance and GEICO offer multicar price breaks to registered domestic partners and partners in state-recognized civil unions.

Some companies also give you a multicar break even if the second vehicle isn’t a traditional sedan, SUV or other similar type of vehicle. For example, if you insure both a car and an RV with GMAC Insurance, you still qualify for the insurer’s 20 percent multivehicle discount.

While it’s true that you often can save money by insuring several vehicles with the same insurer, it’s not always the case.

Justin Herndon, a spokesman for Allstate, says that “every policyholder’s situation is unique,” and that many variables go into a customer’s rate – including vehicle types and model years, vehicle safety features and a policyholder’s driving record.

“You would need to look at all of those variables to determine how a customer’s rate might be affected by adding or removing cars to a policy,” he says.

One policy, two sets of needs

Experts say that aside from the multicar discount, there’s little difference between insuring one car or several cars. However, there are a few things to keep in mind.

If you do insure at least two vehicles on the same policy, Termeer urges you to remember that each car has its own coverage needs. He points out a common scenario where a policyholder who already is insuring an older car adds a second, newer car to the policy.

“Coverage doesn’t have to be the same across vehicles,” Termeer says. “Someone might not want comprehensive and collision on a vehicle that is older.”

By contrast, the policyholder may want roadside assistance coverage on the older car, but may decide against such insurance on the newer car because “if you buy a brand new car, maybe roadside assistance is something that would be included from the dealership,” Termeer says.

If you’re insuring more than one vehicle, consider stacking uninsured or underinsured motorist coverage – commonly known as UI and UIM coverage – if your state allows it.

UI covers damages if you’re injured by a driver who doesn’t have insurance. UIM covers damages if the driver is insured by an amount inadequate to pay for your damages.

When you stack coverage, you multiply the coverage amount by the number of cars you have. So, if your first car has $100,000 in both UI and UIM coverage and you buy a second car and add it to your policy, stacking the coverage would result in $200,000 of both UI and UIM insurance per car per accident.

Twenty-eight states allow some form of stacking, according to the Property Casualty Insurance Association of America, a trade group.

Generally, you’ll pay a slightly higher premium for stacking the insurance. So talk to your insurance agent to make sure stacking makes sense. In fact, sitting down with your agent is a good idea any time you add a new car to your policy, Herndon says.

“Talking to your agent is a great way to review and understand all the coverage options,” he says. 

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