We all need car insurance and there is no getting around it. But if you own more than one car, is it better to cover them individually or all together in a multi-car policy?
Many households have one or more cars parked in their driveway. And each must be insured before you can take them on the road. However, they do not have to be insured separately and many cover providers offer their customers attractive multi-car policies.
It makes sense, of course, that they do. This way they earn your customers not just for one vehicle but for two or more and it helps to keep that business going for a longer period of time.
But while multi-car policies may seem an attractive way forward, they’re not always the best way. The premium you pay depends on several factors, including the vehicles you want to insure and the ages of the people who are likely to be driving them.
What is multi-car insurance?
This popular program allows you to combine multiple car insurance policies into one document. Most insurers offer discounts for each car renewed under such a policy, which could mean significant savings for you.
You should get all the benefits of an individual car insurance policy (no damage discount, window protection, etc.), but with additional discounts. Some insurers offer coverage for up to seven vehicles in one policy, which may even include family members who don’t live at the same address.
Terms and conditions vary by insurer, so you must read your quote and policy documents carefully.
What are the advantages?
save money: There are the potential financial benefits listed above as insurance providers reward loyal customers – and this is certainly one way to show it.
Less paperwork: All vehicles you cover can be consolidated into one document, eliminating unnecessary paperwork, signing forms, organizing bank details and tracking various renewal dates.
Multiple addresses: You don’t necessarily have to live at the same address to qualify for multiple car insurance. Some insurance providers allow immediate family members to live in another property. This is useful, for example, for people who do not work from home or for college or university students.
And the negative?
age restrictions: If one or more of the drivers you put on a multi-car policy are young or inexperienced drivers, this can increase the total cost for all the cars in the policy. Anyone with a bad driving record or penalty points can also affect the award price.
claim impact: If someone claims the policy, it may negatively impact the premium for all vehicles on the next renewal day.
payment: If one car in the multi-car policy is expensive and the others are not as valuable, the more expensive vehicle increases the insurance ratio. It can be a little daunting to pay for multiple cars at once on a renewal date. At least if you insure several cars separately and at different times, you can spread the costs over the year.
Contest: It is unusual for the same insurance company to offer you the best deal on several different cars when you receive individual quotes. So you may miss out on the best price on each car you insure, which can be more than what you save with a multi-car discount from one insurer.
What is the verdict on the multi-car policy?
There’s a good chance multi-car insurance will work well for you and your family, especially if the cars insured are all about the same value and all drivers are sane with no driving creeds and points.
It certainly helps in terms of paperwork and administration, and there’s a good chance the deal will reclaim some valuable car expenses as well. It depends on the drivers and vehicles – adding restrictions like “All drivers must be over 25” will help keep the premium down. In general, the more cars young people have on a policy, the more they can save.
As always, the only way to truly make the right decision for you is to do your homework. This means you calculate what it would cost to insure each car and each of its drivers and then compare that to a multi-vehicle policy for your household. Based on these insights, you can decide whether or not going multiple is an option for you.
And it goes without saying that you’ll need to repeat this exercise every year to make sure you’re still getting the best deal. Premiums can change significantly from year to year, so what was best last year may not be the right solution next year.