Can You Have Two Auto Insurance Policies on One Car?

If you already have an active auto insurance policy, and if you’re on the verge of purchasing another one, you may be wondering whether it’s possible to have two auto insurance policies on one car. Well, the short answer is yes, you can buy more than one auto insurance policy on the same car, but it’s not always a good idea.

There can be various complications if you claim the same auto insurance policy for the same incident including increased premiums, removal of discounts, and more. In most cases it is considered auto insurance fraud which can lead from the cancellation of your auto insurance policy to legal problems.

However, in certain situations having two auto insurance policies for the same car may be necessary. To get things into clear perspective this article discusses the legal aspects of dual auto insurance, whether insurers allow it, why it can be problematic, and when it might be beneficial.

Is it Legal to Have Two Auto Insurance Policies on One Car?

Here’s the most important aspect to consider before making any decision related to car insurance, is it legal? Yes, it is legal to purchase two auto insurance policies on one car, but if you claim both auto insurance policies at the same time then it can lead to legal complications.

Insurance fraud is very common in the US, and that’s why most insurance companies are hyper vigilant to prevent fraudulent claims, or exploitations. According to Coalition Against Insurance Frauds, 10% of all insurance claims in the US are fraudulent which leads up to $308.6B insurance thefts every year.

Now if you claim auto insurance for the same incident from two insurance companies, and if you’re compensated a total amount that exceeds the total compensation required for the damages, then you may get into legal trouble for insurance fraud. Either or both insurance companies may report you to the authorities leading to legal complications.

Even if you don’t get the money, the moment you claim it, you may get sued under the suspicion of attempted insurance fraud. So, there’s a substantial legal risk of having two auto insurance policies on one car. But just to be clear, it isn’t illegal to have auto insurance on one car, claiming it for the same incident can be considered insurance fraud.

Do Insurers Allow You to Claim Auto Insurance for the Same Incident?

Typically, insurers wouldn’t allow you to claim auto insurance for the same incident especially to prevent the scope of insurance fraud. If you’ve claimed auto insurance with two different companies, it can lead to complications in the upcoming days. Insurance companies can access public databases to cross check your current and past auto insurance claims.

In case, if you have claimed auto insurance from two different companies, then both insurers can identify it, and when they do, they might either question you or report you to the authorities.

So, if you have already claimed auto insurance with two different companies, you should consult with them, and inform them of the claims you’ve made, and mutually come to an agreement.

If further complications arise, you always have the option to cancel the auto insurance claim from one of the insurers. So, that’s why it’s always best to only claim auto insurance from one insurer even if you have auto insurance from two different insurance companies.

Most auto insurance companies wouldn’t allow it, but we understand that there are situations when it’s necessary to have two insurance policies on one car. If you’re looking for a reliable insurance agency in Michigan, please consider exploring our auto insurance solutions. If you’d like to visit and talk to an agent in-person, consider checking our regional offices in Flint MI, Saginaw MI, and MT Pleasant MI.

Why Shouldn’t You Have Two Auto Insurance Policies on One Car?

Having two auto insurance means you would have to spend twice as much or more on premiums. Plus, there are various other issues which can lead to numerous complications. Is it really worth it? Well, there are pros and cons of having two insurances on the same car.

But as the disadvantages pose substantial risk, it is essential to stay aware of these to make informed decisions. So, here are the main reasons why you shouldn’t have two auto insurance policies on one car.

It’s recommended to have one auto insurance policy if it covers your requirements within your budget. Here’s a detailed guide to find the best auto insurance in Michigan.

Complications with Insurance Claims

When you apply for an auto insurance claim with two different insurers, it can cause complications between the two insurers. The main problem that can arise here is how much each insurer will compensate for the damages. There can be disagreements between the two insurers which could delay the processing of your insurance coverage.

Whether you have liabilities compensations, accrued medical bills, and vehicle or property damage repair expenses, you may not be able to get the insurance coverage in due time, or it can get delayed.

Possible Delays in Settlement Payments

The most concerning issue of claiming auto insurance with two insurers is, they can have a dispute over how much should each of them cover for your damages. While they are occupied in this conflict to determine the amount each of them should cover, your insurance settlement payments can get delayed drastically.

Until they come to a mutual agreement, and start processing your auto insurance compensation officially, your insurance coverage won’t be issued. So, until then you won’t receive any settlement payments from either insurer.

Also, if either insurer is aware that your car is covered by two policies, they may delay payment expecting the other insurer to cover the damages which can lead to even longer delays in settlement.

Premium Costs May Rise for Both Insurers After a Claim

Every time you make an auto insurance claim your insurance premium typically increases in the following year. When you make a claim from two insurers even for the same incident, each company will treat it as a separate claim, leading to higher insurance rates.

Insurance companies generally determine premium increases based on the frequency of claims, the amount of coverage used, and the total compensation paid out. As a result, making multiple claims even for the same accident can significantly raise your insurance costs.

Chances of Losing Your Good Driver Discount

Most insurance companies don’t allow their policyholders to claim auto insurance from multiple insurers for the same incident. If you have done that, you’ve already violated the agreement which can lead to increased premiums, or even policy cancellation.

On top of that, every time you claim insurance and get compensated, your insurer incurs a significant payout. Insurers mainly provide ‘good driver discounts’ to encourage policyholders to drive more responsibly, especially to those with a good driving record.

Even filing a single claim can put your good driver discount at risk. Violating insurer policies by filing claims from two insurers increases the likelihood of losing the good driver discount.

Your Auto Insurance Claim May Get Rejected

You can have two auto insurance policies on one car, but the moment you claim auto insurance from two auto insurers for the same incident, there’s a high chance that your auto insurance claim may get rejected.

When you make an auto insurance claim from two insurers, it is deemed suspicious as it’s a common insurance tactic of insurance fraud. To prevent such fraudulent claims, insurance companies usually don’t allow their policyholders to claim insurance for the same incident with multiple policyholders.

So, if you’ve claimed your auto insurance with both insurance companies, either or both insurers are most likely to reject your claim.

You May Get Accused of Auto Insurance Fraud

Here’s the worst part, you may get accused of auto insurance fraud for claiming insurance with two different companies. If either or both insurers report you to the police, you may get into legal complications.

This can get even more complicated if it leads to unjust enrichment, so if you receive more compensation from either or both insurers than the actual loss incurred, then there can be deemed as insurance fraud, even if that’s not actually the case.

Remember, it’s legal to have two auto insurance on the same car, but if you’re unaware that claiming auto insurance from both insurers can lead to serious legal complications. So, even if you have two insurance policies on one car, make sure not to claim insurance with both insurance companies for the same incident.

Your Car Insurance May Get Suspended or Cancelled

Many insurers don’t allow their policyholders to have auto insurance for the same policy with multiple insurers. If it’s mentioned in your auto insurance agreement, then having two auto insurance policies on the same car can lead to the suspension or cancellation of your car insurance by either or both insurers.

As you have already agreed to the terms and conditions while purchasing the auto insurance, you can’t even challenge the suspension or cancellation. The moment you agreed to it; you consented to a legal binding that your auto insurance company has the right to suspend or cancel your auto insurance policy if the mentioned agreement is violated.

When You Should Have Two Auto Insurance Policies on One Car

Although having two auto insurance policies on one car has several risks and disadvantages, there are a few exceptional cases when it’s necessary. If you need to acquire two auto insurance policies on one car, make sure to clearly communicate it with your primary insurer.

Clearly specify the reasons why you need to purchase auto insurance coverage from a second insurer for the same policy. Once you come to a mutual agreement with your primary insurer, only then purchase auto insurance coverage from another insurance company for the same car.

Here are 3 valid reasons when you should get two auto insurance policies on one car.

• You need additional auto insurance coverage: You may need additional auto insurance coverage that your current auto insurer does not provide, such as auto insurance for classic and luxury cars, or custom parts and equipment coverage. So, in that case, you can consider purchasing two auto insurance on one car.
• You don’t intend to claim auto insurance for the same incident: If you don’t intend to claim auto insurance for the same incident, then you can purchase two auto insurance policies for enhanced financial protection. But before doing so, make sure it does not violate your primary insurance agreement. Also make sure that your primary insurer mutually agrees to it.
• You’re traveling across different states: If you need to travel across states either periodically or frequently, and if your primary insurer does not provide coverage in every state then you need to get another auto insurance policy for the same car. As auto insurance is legally mandatory in almost every state in the US, you can get two policies without any issues, if this is the reason.

The Bottom Line

If you’re still concerned whether you can get two insurance policies on one car, yes you can. But you should get two auto insurance policies on the same car only when it’s necessary.

To avoid any complication, or legal trouble make sure to review your auto insurance agreement. If it violates your current auto insurance agreement, make sure to discuss it with your primary insurer. Once you reach a mutual agreement, ask your insurer to formally acknowledge it in the documents, just to stay on the safe side.

Similarly, make sure that the other insurer is aware, and officially acknowledges that you have two insurance policies on one car. Although many insurers may not agree to it as it may go against their terms and condition.

If your reasons are valid, you can contact us. We will evaluate your driving records, and insurance history, and if everything checks out accurate, we can make some exceptions and allow you to carry two auto insurance policies for the same car.

FAQ

What happens if you have two insurance policies on one car?

Having two auto insurance policies on one car is legal, however it can lead to delayed settlements, increased premiums, reduction or removal of discounts, and cancellation of your insurance policy depending on your auto insurance agreement. If there’s a mutual agreement with your primary and secondary insurance company, then complications like this may not arise.  

Do all my cars have to be on the same insurance policy?

Not necessarily, you can insure each car with a different insurance company. But if you do that you may need to pay increased premiums, and you might miss out on the benefits of multi-vehicle discounts for insuring with the same insurance provider.

Is it good to have two auto insurances?

Well, that depends on the reasons for getting two auto insurance policies. There are some situations when it’s necessary to get two auto insurance policies. For instance, if your current provider does not provide the required coverage, or if you travel to other states which are not covered by your primary insurer.