Can I Have Two Insurance Policies on my Car?

Generally, buying one policy for your car is easier, cheaper, uncomplicated and provides all the coverage you need. Companies are flexible enough to include most coverage needed. And you can always try another company if you don’t get the protection you want from your current carrier. It is hard to find a good and legitimate reason for needing (or wanting) two insurance policies for one automobile, except rideshare (explained below).

Although it isn’t illegal to arrange two insurance policies for one car, it isn’t hard to see that it can cause many complications and some insurers may take exception to it and even cancel the policy upon finding out the existence of another provider for the same risk.

At times, motorists can make a mistake and unknowingly arrange another policy while they have an active coverage in place. With the auto-renewal facilities, each policy can run alongside each other while the vehicle owner is totally unaware. In such a case, motorists can actually successfully claim the premiums paid from one of the companies on the grounds that they made a mistake and after proving that they had coverage from another source all along. This would mean that one of those companies accept the pointless nature of having two similar coverage and agree to refund the premiums paid.

Also, it is actually difficult to buy part of a policy from one car insurance company and the rest from the other because you cannot normally buy Collision and Comprehensive without Liability and you cannot buy many add-ons without C & C from most providers. They like to sell these as a package and that is how they can afford to offer cheap automobile insurance rates.  

Then, you would be buying an overlapping policy that doesn’t really serve any purpose other than muddying the waters as to which one will pay when you have a claim. There is a chance both insurers may refuse to pay accusing the policyholder of trying to collect two payments for the same damage, especially if both were informed of the incident.

Claiming on two different policies for the exact same loss is fraud and a criminal offence. Auto insurance is there to make the motorists whole again after they suffer a loss and not to make them twice richer than they were before. The same principle applies to most lines of policies.

No insurance company would sell two similar policies for the same car. This suggests that they wouldn’t like you to buy it from other companies either.

However, it is possible that two different people may buy insurance for the same car if they co-own it. It may be due to mistrust or miscommunication but it may be a waste of money since only one of them can be used to make a claim. So, it is better to communicate better and buy one policy that will cover the car and both drivers the way they want.  

Rideshare Exception

Until recently such questions would raise eyebrows and insurers and agents would want to know if there is a cynical reason behind it and what you would actually get out of two different policies that you cannot get from one.

However, lately this concept came into play with rideshare companies and apps where they (or another third-party company) insure the vehicle while it is being used for carrying passengers for commercial gain and the owners’ personal auto insurance policy covers it when it isn’t carrying any fee paying passengers.

In such cases, the vehicle owner won’t be double-dipping or committing a fraud. It would just be a case of determining if rideshare or personal insurance coverage would be applicable and pay the damages.

This is a very interesting concept of two different policies complimenting each other. There may be gray areas but essentially there isn’t overlapping between the two coverage. Also, it is important to note that any driver involved in any rideshare services should inform their personal car insurance company and get a “rideshare endorsement”. Otherwise, the company can refuse claims on the grounds that they would have cancelled the policy had they known.

Most major vehicle insurers would accept and offer rideshare endorsement. And the ones that don’t, wouldn’t be happy for the policyholder to go and buy rideshare endorsement from someone else. Again, this goes to show that where possible you should buy all your coverage from one insurer under one policy.