Insuring Multiple Cars? When It Makes Sense to Use Different Insurance Companies

Owning more than one vehicle is common for many households. You may have a family car as well as a sports car or classic car that you cherish. Or perhaps you have a work vehicle in addition to your personal one. Whatever the case, you’ll need auto insurance coverage for every car you own. But should you get insurance for all your vehicles from the same provider? Or does it make more sense to use different insurance companies?

There are pros and cons to both approaches. Let’s explore when you might want to insure your cars with different insurers versus keeping them under one policy.

The Case for One Auto Insurance Provider

Insuring all your vehicles with the same insurance company offers some potential advantages. Here are the top reasons to bundle multiple cars under one policy:

Multi-car discounts – Most major insurers offer a discount for insuring multiple vehicles on the same policy. This can save you 10% or more compared to having separate policies.

Simpler billing and management – You’ll only have one renewal date, billing cycle, deductible to track and online account to manage if all cars are with the same provider.

Better pricing on some models – Insurers that specialize in standard vehicles may offer better rates than specialty carriers for sports cars or luxury models.

Easier claims process – There’s no ambiguity on which insurer to file with if you have an accident. You won’t risk a delay determining primary liability.

Coverage continuity – Details like your deductible, liability limits and extra protections will be consistent across all vehicles when insured together.

For many drivers, the simplicity and cost savings of a bundled multi-car policy make using one provider the smart choice.

When Separate Auto Insurance Policies Make Sense

However, there are also solid reasons you might want to insure your vehicles across different insurance companies:

Specialty vehicles require specialty insurance – Insurers that focus on standard cars often don’t provide coverage for classic cars, ATVs, RVs and other specialty vehicles. You’ll need to shop specialty insurers that offer those policies.

Better pricing on some models – Just as bundled policies can offer savings on some models, separate insurers may provide cheaper rates for sports cars, luxury vehicles or classics than a standard insurer.

Differing coverage needs – You may want just basic liability on an old beater car but comprehensive coverage for a new vehicle. Separate policies allow customization.

Independent children – Once your kids move out and get their own policy, you no longer need to bundle theirs with your vehicles.

Partner has existing policy – If you move in together, you don’t necessarily have to combine auto policies right away.

Reputable insurer doesn’t write all models – An insurer you trust might not offer policies for some of your vehicles.

There are particular situations where using multiple insurers clearly makes sense for your situation. Let’s look at some specific examples.

Insuring a Sports Car or Luxury Vehicle

Specialty auto insurers exist to serve the needs of luxury and performance vehicle owners. Companies like Chubb, Hagerty, and Cincinnati Insurance have expertise in covering high-end cars. They can provide:

• Agreed value coverage – Pays the agreed amount if your rare car is totaled, rather than depreciated value.

• Accessory coverage – Covers damage to aftermarket parts like custom wheels, stereos, or suspension.

• Limited usage discounts – Gives discounts for driving your sports car under a set annual mileage.

• Enthusiast club discounts – Many insurers offer reduced rates for belonging to a car club.

Mainstream insurers often cannot match this specialized coverage. So getting a specialty auto policy just for your prized sports car or luxury vehicle while insuring your daily driver with a standard company may be the savvy choice.

Insuring Classic Cars

Similar to sports cars, classic vehicles require insurance that caters to their unique needs. Specialty classic car insurers offer:

• Agreed value coverage – As classics appreciate, agreed value ensures you get the full amount if it’s totaled.

• Spare parts coverage – Helps pay to replace hard-to-find spare parts for repairs.

• Limited usage discounts – Taking your cherry red ’57 Chevy out just for weekends? Limited usage discounts recognize when your ride is mostly stored.

• Appreciation coverage – Some companies cover the increased value of collectible cars as they appreciate to ensure you have enough coverage.

Leading classic car insurers include American Collectors, Grundy and Hagerty. It’s wise to get quotes from them in addition to your standard auto insurer when insuring a classic.

Insuring Work Vehicles

If your employer provides a vehicle for business use, it will need commercial auto coverage either through your company’s policy or a personal commercial policy in your name. Key things to know:

• Personal commercial policies only cover business-related use, not personal driving.

• Your employer’s commercial policy may cover you, but double check if you need your own.

• Commercial policies have different limits and exclusions than personal auto insurance.

Whether a commercial policy or your employer’s coverage is the best option depends on your situation. Consult your HR department to understand if and how you are covered to drive a company-provided vehicle.

Teen Drivers on Their Own Policy

Once your teenagers move out and get their own car insurance, it often makes sense for them to have their own policy rather than staying bundled on yours. Reasons they may want their own policy include:

• Avoiding premium hikes on your policy from adding a teen driver.

• Building independent insurance history by having a policy in their own name.

• Gaining experience managing insurance bills and details.

• Qualifying for discounts like good student discounts that may not apply to your policy.

As young drivers gain experience, having their own policy sets them up for smoother insurance management down the road.

Saving Money Per Vehicle

Bundled insurance clearly saves money insuring multiple standard vehicles driven by family members. But for specialized vehicles or drivers, separating them out to policies from specialty or independent insurers can sometimes save money.

For example, a couple with a minivan, old sedan, and new electric vehicle could consider:

• Insure minivan and sedan together to get multi-car discount

• Insure electric vehicle separately with company offering discounts for EVs

• Save more per vehicle than bundling all three together

Crunching the numbers for your specific vehicles and driving profiles is the best way to know if one bundled policy or a mix of insurers saves more.

Weighing Convenience vs. Cost

In deciding whether to insure all your vehicles together or use different insurers, also consider the convenience factor. Ask yourself:

• How much time do I want to spend managing insurance?

• How likely am I to forget renewals across multiple policies?

• How difficult will filing claims be across multiple insurers?

• Is the potential savings worth the extra complexity?

There’s value in the simplicity of managing just one policy. But for substantial per-vehicle savings, separate insurers may be worth the trade-off.

When to Re-Evaluate Your Car Insurance Strategy

As your household vehicles and insurance needs evolve, revisit whether a bundled or mixed approach works better. Some common times to re-evaluate include:

• Adding or removing a vehicle from your policy

• Insuring a new teen or young adult driver

• Purchasing a specialty vehicle like a classic or luxury car

• Switching a vehicle usage type like commuting to pleasure only

As circumstances change, the insurance strategy that once made sense may no longer be the optimal approach. Running the numbers periodically can ensure you maximize savings.

Key Takeaways

Here are some key points to remember when deciding whether to insure vehicles together or across separate policies:

• Bundling typically saves money on standard family vehicles driven regularly.

• Specialty vehicles often benefit from insurers that focus on that type of car.

• Adult children ready for independence may want their own policy.

• Work vehicles need commercial policies, either from you or your employer.

• Crunch the numbers periodically as your needs evolve.

Finding the right insurance strategy comes down to your particular situation. Assess your vehicles, drivers, and coverage needs to determine the ideal approach. And whether you choose one insurer or several, make sure every vehicle and