Thinking of Using Two Auto Insurers for Your Car?

Posted in Auto Insurance

April 8th, 2009

The minimum type of car insurance coverage you must carry varies from state to state, and if you have the spare cash, theoretically you can have multiple insurance policies on your vehicles. However, it is illegal to have multiple insurance policies on one car.

Why Using Multiple Auto Insurers May Be a Bad Idea

Consumers need to think long and hard about getting their car insurance from two auto insurance companies. During times of need, it may be difficult to figure out where to submit your claim. Having multiple insurers can complicate things significantly. If there is some type of accident for which you need to submit a claim, ultimately one insurer is going to be considered yourprimary and the other one would be secondary. Thus, getting your claim paid can turn into a nightmare as they may end up trying to back out of their responsibility.

A driver with multiple vehicles would probably end up paying more money to insure their vehicles separately. Many times, insurance providers offer multi-vehicle discounts to their policy holders to increase their revenue from your one account. Insuring your cars on different policies may be costly for another reason. Typically, insurance companies base the premium on the highest risk driver and if you assign the highest risk driver to multiple vehicles, you may be paying more than you have to.

When Will I Need Multiple Insurance Policies?

Only in rare circumstances are there benefits to having multiple insurance policies. There is something called stacking your insurance. If you have an accident and have twopolicies both with uninsured and underinsured motorist coverage, you can make a claim under each policy until the full amount of your damages are paid off.

Additionally, multiple insurance providers may be a necessity for auto enthusiasts who need specialty insurance for their classic or antique cars. Specialty insurance may be required for the collectible vehicle and your regular commuter car would probably get a better deal through typical auto insurance coverage.