Is it legal to have two insurance policies for one car? – Jalopnik

Yes, it is generally legal to have two insurance policies on one car. It is generally not necessary. With more and more drivers reducing or even dropping their car insurance, carrying two policies on one car is the opposite of that. You may have two insurance policies for one car, but one insurer may not be willing to insure the same vehicle twice, meaning you would have shopped for a second company and paid two premiums. Through my professional career as a body shop manager, as a physical damage specialist for major insurers, and now on the claims lender side, it’s more common than you might think for problems to arise when it comes to your car’s insurance policy. Or, in this case, policy.

People may get multiple policies on one vehicle for a variety of reasons, including because they think their old policy has expired and have bought a new one. However, there is one very specific insurance rule that you should never exceed, and that is the principle of indemnity. The same protections that prevent an insurer from undervaluing your loss mean that you cannot benefit from your loss, or that you cannot be “overcompensated.” You may receive nothing more and nothing less than the actual amount of the damage or loss. What does this mean in simple terms? Getting the entire money back from a single loss on two different policies is insurance fraud. And even if it’s allowed, double coverage can still be ugly because insurance is a contract and not a buffet.

A quick twist: two policies can be involved in one accident, even if you didn’t intentionally buy two policies for the same car. That’s because car insurance generally follows the car on the policy and can extend to a driver who has your permission. So if your friend borrows your car and turns it into modern art with a guardrail, your policy is usually the one to pay first. This is the difference between primary and secondary coverage. For this example, let’s say your policy limits have been reached; the friend’s policy now kicks in and tries to cover the rest. So while these are not exactly two policies for the same car, in some circumstances the cover can extend across multiple policies to one vehicle.

Now imagine two entire policies written for the same vehicle, which is something I’ve often seen with co-owned vehicles or with couples who never rolled their policies into one policy. Suddenly you’re not doubly protected, you’re in a three-person group chat with everyone pointing to everyone else to make the first move – it’s all bad. When there is uncertainty, one insurer may try to shift the burden to the other, and vice versa.

So we talked about why having two overlapping automatic policies doesn’t work. Let’s talk about why people do this, and some ways to go about it better.

If your goal is more protection, there is a cleaner solution. It’s boring and that’s why it works. If you share or co-own a car, choose one policy and add the additional driver. If you live with a partner, adding them under one policy usually provides discounts for multiple vehicles. And it keeps it on one bill to pay, not two.

If you’re worried about being sued so harshly that your descendants will feel the impact, look into higher liability limits on your existing policy – ​​a second won’t help here. If it still doesn’t concern you, there is an insurance product called an umbrella policy that provides additional liability coverage on top of your primary policy. Keywords: primary. It’s worth saying that an umbrella policy doesn’t cover your property directly, so if you wreck your own car, it won’t help you repair it. It only protects you if the person hitting you decides he wants to own your soul, your house, and your collection of Lego Technic models.

What if you find yourself with two policies because you just “forgot”? Review your options between the two and cancel one. Make sure you don’t put yourself in a bad position by canceling one thing before the other starts.

If you’re looking for insurance for a car you don’t even own, that’s a whole different story. Watch out for these common problems when holding two policies for one car and drive safely.