A quick guide to multi car insurance policies and how they work
Published Sun, Dec 9, 2012 Updated Tue, Feb 16, 2021
There was a time when having a single car was a luxury and only the rich would have more than one, but in recent years it has become more and more common for families to have 2 cars or even more. There are plenty of reasons to have 2 cars in a household – perhaps you both work and need a car to commute, or maybe you have one nice sports car and another more practical car for shopping trips and taking the kids out. Whatever the reasons, if you have more than one car in your household you might be eligible for a multi car insurance policy, which could save you money.
Who are these policies for?
Multi car policies are for anyone who has more than one car in the household. You might own 2 or 3 cars yourself or you might just have several people at an address who all drive – maybe your son or daughter who lives at home also has a car. Some people are surprised to find out that you don’t even have to be family to qualify for a policy. If you share a house with some friends and you all drive you could get yourselves a discount.
Who is it not for?
Obviously you can’t add other cars/drivers who don’t live with you; also in most cases you can’t add a business vehicle to a multi car insurance policy, so if your dad is a taxi driver he’ll need a separate policy. That’s the only exclusion really though!
How does it work?
The insurance cover is almost exactly the same as your individual policies would be; the only real difference being that they are all under the same policy, with the same renewal date and just one payment for all the cars covered. The benefit of course (other than the convenience) is that you generally get a discount, the value of which depends on how many cars are on the policy. Some insures may give you as much as a 30% discount if you have 3-5 cars on the policy, so there is a lot to be saved.
On the policy each car will have its own insurance details and different cars on the policy can have different main drivers, named drivers and everything else. You can even have different levels of cover (third party/fully comp) and different excesses for different vehicles. This is handy if you drive your car every day but your wife only drives on Mondays and Tuesdays – you can have a regular policy whilst she has a tracker fitted to save on mileage; it’s all very flexible.
Misconceptions and pitfalls
These policies are effectively just 2-5 regular policies all under one policy number and each car will have its own driver(s). If there are several of you with several cars, you cannot all automatically drive every car on the policy unless you are a named driver for every car on the policy.
Getting the timing right
Of course, another worry many people have is that your previous insurance policies will not all end at the same time (well, it’s unlikely anyway) so how can you take out a multi car insurance policy without ending up with one or more of the vehicles being insured twice at once? Well what you can do, is take out a policy for the first car that needs it and add more cars as they come up for renewal. Your premium will get bigger as each car is added of course, but so will your discount. And at the end of the policy you can renew all cars for another year.
But is it really any cheaper?
A 30% discount will certainly save you money, but it does effectively mean that every car in your household will be insured by the same insurance company. Naturally if you were buying policies separately you might well find that your son gets a cheaper price from company x whilst you get a cheaper price from company y. So really the best thing to do is get a price comparison for each car individually and then put in a quote for a multi car policy and see which works out cheaper. There might not be a lot in it, but the more cars you add the more you might save.