Is it bad to be double covered on car insurance?
It is bad to be double covered on car insurance, though it isn't illegal. If you're in an at-fault accident, rates for both companies could increase. The claims process could take longer, regardless of who is at fault, because it isn't immediately clear which company is responsible. It's also bad to be double covered on car insurance because filing claims for the same accident with both companies is fraudulent and could result in a felony.
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UPDATED: Dec 28, 2021
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- It isn’t illegal to be double covered on car insurance, but it isn’t recommended because it will cost more (sometimes significantly more) and can cause several issues
- Having policies with two companies on the same car could be insurance fraud if you file claims with both companies for the same incident
- If more than one person in your household drives your car, you don’t need to take out individual insurance policies for each driver because you can add drivers to your existing policy to ensure they’re covered when driving your car
Is it bad to be double covered on car insurance? The short answer is yes in most cases. We know you have related questions. Can I have two insurance policies on two different cars? Is it cheaper to have two cars on one policy? Do I have to insure all my cars with the same company?
Read this overview on whether or not it’s a bad idea to be double covered on car insurance to get the details.
But before we get started, it’s always a good idea to look for ways to save on your rates. Regardless of the amount of coverage or number of policies you have, use your ZIP code in the comparison tool on this page to get free quotes from top companies to get start saving money right now.
Is it a good idea to buy two car insurance policies for the same vehicle?
Buying multiple car insurance policies on the same vehicle isn’t illegal, but it isn’t necessarily recommended.
You won’t be able to buy two policies on the same car from the same insurance company because insurance companies won’t sell you two policies for the same vehicle. Theoretically, you can buy two policies on the same vehicle from two different companies, but this can result in unintended consequences (more on this in the next section). In some cases, it may violate the terms of one or both policies.
You may not even intend to have two policies on the same vehicle. Suppose you don’t keep track of when your policy term ends. In that case, you could accidentally buy coverage from a different company on a car whose previous policy is still in place (until its expiration).
What are the pros and cons of double coverage?
There aren’t many (if any) pros to double coverage because it’s not a good idea to buy two policies on the same car. For one, you’re spending extra money for no real benefit. And, as we noted earlier, having two policies from two companies could result in a violation of terms.
If you have two policies with two different companies and you’re in an accident, having double coverage could slow the claims process. It will take extra time to determine which company will be responsible for claims and any resulting payouts.
If you aren’t careful, you could also be accused of insurance fraud. It is illegal to file claims with both companies after an accident (this is called double-dipping). Reports from the FBI indicate that insurance fraud (not counting health insurance) costs around $40 billion per year. Insurance fraud is serious and can result in a felony. Don’t take the risk. If you try to commit insurance fraud, you will get caught.
Another downside is if you’re in an at-fault accident. Even if only one company handles the claims process, your rates with both companies could increase. And if you have other drivers in your home who use your vehicle, you could be required to add those drivers to both policies, which could dramatically increase your rates.
Can I insure a car that is already insured by someone else?
If the car isn’t in your name, it’s unlikely that you’ll be able to insure a vehicle that someone else owns and already insures. If the car is in your name (or is co-owned by the other driver), you could theoretically buy coverage for a car that is already insured. However, for the reasons we’ve already discussed, this probably isn’t a great idea.
Can you have two main drivers insured on the same car? Keep reading to find out.
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Can you have multiple drivers insured on the same car, or should you have different policies?
If your vehicle is used by others who live in your household, you can add them to your policy as additional drivers instead of buying individual policies for each of them.
However, if other drivers in your household are considered high-risk, you may need to assess the cost of adding them to your policy because it could increase your rates. You can even list them as excluded drivers if you don’t want them to be on your policy or driving your vehicle.
There isn’t a limit on the number of car insurance policies you can have in a single household, so the high-risk drivers in your home could buy their own insurance coverage.
A permissive use clause may apply if your partner or other individuals who don’t live in your household use your vehicle infrequently. With permissive use, drivers who don’t live with you can use your vehicle periodically (typically less than 10 or 15 times per year), as long as they have your permission. However, this only applies if they have insurance on their vehicles.
The Bottom Line: Is it bad to be double covered on car insurance?
Being double-covered on car insurance isn’t illegal. Still, it isn’t a good idea because it can result in several issues, including:
- Higher costs (since you’re paying two insurance premiums on the same vehicle)
- Slower claims processes if you’re in an accident
- Accusations of fraud, depending on the circumstances
Suppose you aren’t the only driver in your household who frequently uses your vehicle. In that case, you can add the other drivers to your existing policy rather than buying separate coverage for each additional driver.
Suppose you have a partner or family member who doesn’t live in your household but periodically uses your vehicle. In that case, you may not need to add them to your policy because permissive use will probably apply. However, it’s always a good idea to confirm this clause with your insurance company.
Whether you decide that it’s bad to be double covered on car insurance or not (given your unique situation), you’re probably looking for ways to save on your coverage. Our recommendation is to comparison shop. You could save an average of $500 on your rates. You can start saving today by entering your ZIP code in the tool on this page to get free car insurance quotes from companies in your area.
Frequently Asked Questions: Is it bad to be double covered on car insurance?
If you’re still wondering whether it’s bad to be double covered on car insurance, read through these frequently asked questions for more information.
#1 – How do you qualify for a multi-policy discount?
If you have multiple car insurance policies with the same company, you may qualify for a multi-policy discount (if the company offers one).
#2 – How much does car insurance cost?
The average cost of car insurance in the U.S. is $328 per month ($3,932 per year). However, your rates will vary based on where you live, who you buy your policy from, and various personal statistics like your age and driving record.
#3 – From which car insurance companies should you consider buying coverage?
Only you can decide which car insurance company is right for your needs. When you’re researching companies, factors to consider include availability, coverage options, average rates, customer service ratings, and financial stability. If you’re not sure where to start or how to compare car insurance companies, take a few minutes to look over the car insurance company reviews offered on our website.