Can I Insure a Car Under Two Different Insurance Companies?
Legal Versus Acceptable
- Car insurance is issued for a specific vehicle, and includes all named drivers on the policy. If you are going to purchase more than one insurance policy for the same vehicle, purchase completely separate coverages. The primary policy would include the state minimum requirements, and the second policy would contain collision coverage, roadside assistance or other optional insurance. Before you purchase a second policy, verify that your insurance company allows dual coverages.
Multi Policy Problems
- The problem with having more than one insurance policy on a car is that there is a possibility of both insurance companies denying a claim. Each company can argue that the other company was responsible, or that the one policy canceled the other. Avoid these problems by not purchasing policies that overlap. Securing all of your coverage through a single policy is usually much less expensive than purchasing dual coverages.
Umbrella Liability Insurance
- If your primary interest in a second policy is to provide extra liability coverage, an umbrella policy may be the best solution. Umbrella insurance is liability coverage that can be applied to your home or car, up to the full value of the policy. For instance, if your car insurance paid $50,000 on a $75,000 insurance claim, the umbrella policy would pay off the remaining $25,000. Umbrella policies do not replace traditional liability insurance, but serve as additional coverage after the regular coverage reaches the liability limit. Because an umbrella policy cannot be used as a substitute, it will not conflict with your home or car insurance when you file a claim.
- An insurance company will only issue a policy to the person who owns or is purchasing the car. The reason for this is that insurance companies only provide coverage to a person who has an "insurable interest," a term that means the insured person would suffer a loss if the car were stolen or totaled. The owner of the car can add other drivers to the policy, but cannot assign someone else as the primary policyholder.