Can You Have Two Insurance Policies For One Car? Here’s What The Law Says

Many drivers have been there — a sudden fender bender or a loss of control on a rainy day. When the worst happens, we rely on auto insurance to cover the damage. Almost every state requires auto insurance by law, and for good reason. If you cause an accident or damage another person’s property, you’re responsible. Even a minor accident can cause thousands in repair bills. You could also be on the hook for hospital and legal bills. If you finance your vehicle when you buy it, of course, your lender will likely require you to carry a certain amount of insurance coverage.

One policy makes sense, even if you don’t go with the highest-ranked auto insurance company, but what about two? If you use your vehicle for both work and pleasure or you want to cover expensive aftermarket additions that your standard policy excludes, you may have thought about purchasing a second policy. While no U.S. law prohibits carrying multiple insurance policies on one vehicle, paying for both is usually a waste of money.

Sometimes we accidentally end up carrying multiple policies for the same vehicle — it’s especially common when you change insurance companies and forget to cancel your old policy. Accidental or otherwise, you cannot make two claims after an accident to get double the payout. If you try, it could slow down the payout process, and both insurers may try to claim the other is responsible. Double-insuring may also go against an insurer’s policies, and could lead to you losing perks like good driver or bundling discounts.

Even when the process of filing an insurance claim goes smoothly, a payout takes time. If you have more than one insurance policy on your vehicle, it may delay the process even further. Your insurance companies will do something called a coordination of benefits to determine which policy is responsible for the claim. Unless one company pays first and the second company only pays for anything the first company did not cover, you’re committing insurance fraud.

Ultimately, paying two premiums for two insurance policies makes little sense for most drivers. You’re paying for double the coverage but only receiving benefits from one policy when you file a claim. If your insurance policy doesn’t offer all the coverage you need or want, you should shop around for a better policy rather than purchasing a second. Stay away from cheap car insurance, which may come with high deductibles, minimal coverage, and poor claims support. 

For most people, the only instance when buying two policies makes sense is if you’re transitioning from one policy to another and need to fill a coverage gap. To avoid accidentally paying for two policies at once, know when the cancellation of your old policy is effective and start your new policy with as little overlap as possible. If you and your spouse share a vehicle, you only need one policy, with both of you listed as drivers. If you share a car with a significant other who doesn’t live with you, they likely fall under your insurance company’s permissive use clause, which lets them drive your vehicle with your consent, eliminating the need for a second policy.