Can You Have Two Car Insurance Policies?

Not too long ago, a friend complained to me about a problem with her auto insurance. She'd switched to a new company, but her husband never canceled the old policy. For about three months, until they discovered the snafu, she had two insurance policies on her vehicle.

My friend was annoyed because this was a waste of money – there was no reason for her to pay for double coverage. Of course, no one stopped her since both insurers were getting paid and the double coverage wasn’t illegal. But it didn't make financial sense to buy the same coverage twice, and if she had made a claim, it would have made things pretty complicated.

Now, my friend had two policies by accident. But can you have two car insurance policies on purpose, and does it ever make sense? Here's what you need to know about getting double coverage.

Key takeaways

• You are legally allowed to buy two car insurance policies, but insurers might not offer you double coverage.
• It can be confusing to manage two policies and harder to get claims paid if you have redundant coverage.
• Buying two policies for different purposes can sometimes make sense, but it is often more expensive than finding one insurer that can meet all your coverage needs.

Rules on multiple car insurance policies

There are a few different ways you could end up with multiple car insurance policies.

• You could have two different policies covering the same drivers on the same vehicle.
• You could have two different policies, each covering different drivers using the same vehicle.
• You could have two different policies covering two separate vehicles.

The rules, pros, and cons of having multiple policies can vary depending on which scenario applies to your insurance situation.

Can you have two policies on the same vehicle?

My friend’s double policy situation was accidental, but you might sometimes want to cover the same car twice on purpose. However, this isn’t necessarily feasible.

"It's usually perfectly legal to have two car insurance policies on the same vehicle, but it's important to be upfront with the insurers about what you're doing," said David Goguen, J.D., a legal editor at Nolo. "It might not even be possible if you disclose everything, as you should."

As Goguen explained, "One car insurance company will almost certainly never let you buy two identical policies on the same vehicle, and if you try going to Insurance Company B to buy a second policy on a vehicle that's already insured by Insurance Company A, you'll need to disclose that the vehicle is already covered. It's a near-certainty that Company B will refuse to issue you a second policy meant to provide the same coverage."

Even if an insurer does cover the same risk twice, it's likely their contract would specify that they'll serve as secondary coverage if you have another policy. That could mean each insurance company tries to make the other pay. And, of course, you can't double-dip and make a claim with both. "It's usually not legal to file two car insurance claims under identical policies issued by two different car insurance companies," Goguen warned. "The coverage and the losses you're claiming typically need to be different."

Now, if you buy two policies on the same vehicle but they each cover different drivers, you no longer have duplicated coverage. This actually makes sense sometimes. Say you and your partner share a car and they get a DUI. You might not want to pay for expensive insurance coverage for someone with a drunk driving history. You could get a policy that excludes your partner, and they can get their own policy that covers them while driving that car.

Likewise, if you need different kinds of coverage on the same vehicle, having multiple policies might make sense. "The most common example here is when you use your personal vehicle as part of your business or when you're driving for a rideshare company like Uber or Lyft," according to Goguen. "In those situations, it might be necessary to carry more than one policy."

But buying two separate policies isn't always the right move, even under these circumstances. As Goguen explained, it's often easier to find a single insurer offering all the types of car insurance you need. Getting different protections from different companies makes sense only if you really want a policy from a particular insurer that can't offer all the coverage you need.

Can you have two policies on different vehicles?

Getting two different car insurance policies on two different vehicles is very different than doubling up coverage on the same car. Here, you aren't buying a redundant policy – you're covering different risks entirely.

Still, while you can do this without violating policies or laws, it's usually not the smartest approach. Instead, it's often better to add your second car to your current coverage to score a multi-policy discount, which can save you money. For example, Progressive advertised that you could save on average 12% by insuring two cars on one policy. It's also an easier option.

There are some situations where getting two different policies could make sense, though.

One example is if two different insurers offer cheaper prices for different cars you own. Another is if you have a classic car and a daily car and want a specialized policy on your classic car that comes from a company focused only on insuring these vehicles.

If you have different vehicles registered in different states, buying policies from different companies could also be smart. My husband and I live in Florida and have a vacation house in Pennsylvania, so we have cars registered in both states. We have different insurance companies for the two vehicles because the insurer offering the cheapest coverage in Pennsylvania doesn't even offer Florida policies.

But outside of these situations, passing up the multi-policy discount for no good reason is rarely your best choice.

Benefits of having two policies

Here are some of the biggest benefits of having two policies.

• You can make sure you have all the coverage you need. As mentioned above, you may want one company to insure your car for business purposes and another for personal use. You may also want one company for a classic car and another for your everyday vehicle.
• You might save money. It's usually cheaper to just have one policy, but not always. Keeping a high-risk driver off your policy is one possible way to save by buying two separate policies. Another is buying the cheapest insurance policy for each vehicle when you have different vehicle types or need policies in different locations.

Drawbacks of having two policies

Here are some of the biggest downsides of doubling your coverage.

• Your insurer may not allow it. As Goguen discussed, most insurers will not let you cover the same risk twice, so getting two policies can be challenging.
• Making claims becomes much more complicated. Gogeun said it could "create some headaches" to make a claim when two policies cover the same car, especially if the claim falls into a gray area and it's not clear which insurer should pay.
• You might pay more for coverage. If you don't take advantage of multi-policy discounts and you pay double premiums, you'll almost always spend more on insurance.

So, is it worth it?

While you want to have the best car insurance that fully protects you from losses, that rarely means buying two separate car insurance policies unless you have a clear reason to do so. Buying separate coverage often just makes things more complicated and expensive.

"Big picture-wise, it probably makes sense to buy more than one car insurance policy on the same vehicle only if the policies serve different purposes," Goguen said. "If you're getting complete coverage benefits with little or no overlap, the extra cost is probably necessary."

To decide what's best, ask yourself what the second policy is doing for you. If it's offering you something your first policy can't, go ahead with the purchase. But if you can find another company that meets all your insurance needs with one policy, you're often better off with that approach.

Tips for managing the policies

If you're considering buying multiple policies, be sure to follow these tips to pay the least amount possible and manage your policies as effectively as you can.

• Shop around for the best price. If you're going to pay double premiums, it's even more important that you find the best rates. Get quotes online from multiple insurers to make sure you get the most affordable coverage for each kind of insurance you're buying. Don’t forget to check for all available discounts to save more.
• Disclose your coverage to each insurer. Don't try to hide the fact you have another insurance policy when you buy additional coverage. This could create serious complications if you have to make a claim.
• Read the fine print. Find out if your insurance company will try to make the other company pay first if you have to make a claim with multiple policies active.
• Don't double dip. You can't make two insurance claims for the same loss since that would be insurance fraud. Not only could you lose your coverage, but you might end up in serious legal trouble, including potential jail time and penalties.
• Simplify making your payments. Since we have two different insurance companies providing policies for our cars, we set up autopay for the premiums on both and pay each policy once yearly instead of making monthly payments. This makes handling multiple policies simpler.

Alternatives to two car insurance policies

If you want to save on car insurance costs, explore all of your alternatives before you buy two separate insurance policies. For example, Progressive offers a generous multi-policy discount. It may be cheaper to cover multiple cars with this insurer rather than buying separate policies.

Many companies, including GEICO and State Farm, offer coverage for regular and classic vehicles and provide commercial coverage in addition to your personal coverage.

By exploring all your options to see if one company can fit all your needs, you can potentially avoid the added stress and complexity of having two separate kinds of coverage at a time.

FAQ

Bottom line

While there are a few times when it makes sense to buy two car insurance policies, you’ll often find better options that keep things simpler and likely save you money. By avoiding having multiple policies, you might run into fewer issues with your insurer if you need to file a claim, and you can avoid breaking any rules the company might have about covering the same risk.

Be sure to shop around carefully and explore all the different ways to get the protection you need before you decide what coverage option is right for you. It’s also wise to speak with an insurance agent who can advise you on what makes sense for insuring your household’s drivers and vehicles.