Dual Auto Insurance: Double The Coverage?

It is possible to have two types of auto insurance, and while it is legal to have two car insurance policies, it is generally not recommended. Although having two insurance policies can provide certain benefits in specific situations, it also comes with several drawbacks and potential complications.

Having two auto insurance policies can be beneficial in cases where individuals have different cars for personal and work use, or if they have cars garaged in different states with varying insurance regulations. It can also be useful for those who own classic, luxury, or exotic vehicles that require specialised coverage.

However, the disadvantages of having two policies often outweigh the advantages. It can be more expensive, with individuals having to pay separate premiums for each policy. Additionally, filing the same claim with two different insurance providers is considered insurance fraud and can lead to legal penalties. Having two policies can also complicate the claims process, potentially resulting in delays or non-payment of claims.

Therefore, it is generally more practical and financially sensible to have a single insurance policy that meets your specific needs or to utilise a multi-car policy if you have multiple vehicles.

Two policies on one car is called duplicate coverage

Having two insurance policies on one car is called "duplicate coverage". While it is not illegal to have two policies on the same car, it is generally not recommended.

Disadvantages of Duplicate Coverage

Having two policies on the same car can lead to several complications. Firstly, it can be very expensive as you will have to pay two separate premiums, resulting in higher overall costs without any additional benefits. Secondly, filing a claim can become complicated and time-consuming. Both insurance companies will need to coordinate and agree on how to settle the claim, which can delay the settlement process. Additionally, there is a risk of being accused of insurance fraud if you file the same claim with both insurers, as this is considered "unjust enrichment".

When Duplicate Coverage Might Make Sense

Despite the disadvantages, there are certain scenarios where having two insurance policies on one car might be beneficial:

• New Vehicle Purchase: When buying a new car, you may want to get a separate policy, especially if it has different coverage requirements than your existing vehicle.
• Luxury or Classic Vehicle: If you own a luxury or classic car that requires specialized coverage, a separate policy tailored specifically for this type of vehicle may be preferable.
• Additional Driver: If you are purchasing coverage for another driver, such as a teenager or a high-risk driver, a separate policy can help protect your own premium rates.
• Loyalty Discounts: If you have a loyalty discount on an existing policy, you may want to keep it while adding a new policy for additional vehicles.
• Separation or Divorce: In the event of a separation or divorce, separate policies may be necessary to ensure that everyone is covered.

Best Practices

While there are situations where duplicate coverage can be beneficial, it is generally advisable to invest in one comprehensive policy that covers all your vehicles. This can provide better value, as you can often add multiple vehicles to a single policy at a discounted rate. It is important to carefully consider your options and understand the specific elements of car insurance policies to make the most informed decision.

It is legal to have two policies on one car

It is legal to have two insurance policies on one car. However, this does not mean that you will get double the payout in the event of an accident or theft. In fact, having two insurance policies on the same vehicle is generally not recommended.

Firstly, your insurance company may not be willing to insure the same vehicle twice. You may have to buy a second policy from another insurer and pay both bills. Secondly, if you file the same claim with two different insurance providers, it is considered insurance fraud. This is known as unjust enrichment.

Having two insurance policies on one car can also make the claims process more complicated and lengthy. Your two insurance companies will need to agree on who will cover what part of the claim, which can dramatically extend the time it takes for you to receive a settlement. Additionally, your premium costs from both insurers will likely rise after a claim, and you could lose your good driver discount on both policies.

Therefore, it is generally more practical and financially sensible to have one insurance policy on a vehicle, even if there are multiple drivers.

Two policies on one car may violate the rules of insurance carriers

While it is legal to have two insurance policies on one car, doing so may violate the rules of one or both of your insurers.

If an insurance company discovers that you have another policy on the same vehicle, they may ask the other insurer to pay for future claims. This can lead to delayed or unpaid claims if the insurers cannot agree on who should pay.

Additionally, having two policies on one car can make the claims process more complicated. If you file the same claim with two different insurance companies, it is considered insurance fraud, which is illegal.

Most car insurance companies will not allow another insurance company to insure the same car. If they do, you will have to pay two separate premiums, which will increase if you file a claim.

Overall, it is generally not recommended to have two insurance policies on one car, as it can lead to complications and increased costs without providing any additional benefits.

Two policies on one car will not provide double the payout

While it is not illegal to have two insurance policies on the same car, it is not recommended. Having two policies will not provide double the payout. In fact, it will not provide any additional benefit, but it will double your insurance costs.

If you file a claim, your insurance providers will coordinate with each other to determine who pays what, so you will not receive double compensation. This coordination can cause delays and complications in the claims process. If you file the same claim with both providers, this will be considered insurance fraud, which is illegal.

Additionally, if one of your insurance companies knows that you have another policy on the same car, they may ask the other company to pay your claims in the future. This can result in delayed or unpaid claims.

Therefore, it is generally recommended that you have one insurance policy that is tailored to your needs, rather than two policies on the same car.

Two policies on two different cars is possible but costly

It is possible to have two car insurance policies on two different cars. However, it is an expensive option and is not recommended by experts.

While there are no laws prohibiting you from purchasing two auto policies from two different companies, insurers will not allow you to purchase two policies on the same car. If you have an accident and file two claims with two different insurance providers, this constitutes insurance fraud, known as unjust enrichment.

Having two policies means paying two separate premiums, which is very costly, and there is no added benefit. Claims can also become complicated and take much longer to settle. For example, the two insurance companies will need to agree on who will cover what part of the claim. Additionally, your premium costs from both insurers will rise after a claim, and you could lose any good driver discounts on both policies.

If you live with a partner, it is recommended that you share a single car insurance policy. This will save you money and you can still take advantage of multipolicy discounts.

Frequently asked questions