Multi car insurance is a great option for families and groups. Rather than covering a single car, the multi policy can cover numerous cars. Most multi policies will cover between two and five cars. Multi policies normally offer all of the same benefits as a regular policy but extend it to multiple cars. The only condition most insurers apply to the insured vehicles is that they must all be registered at the same address. However, although this seems like a great deal, multi car insurance policies don’t always have the best reputation. So, what are the pros and cons of multi car insurance?
The pros of multi car insurance
A discount. One of the major reasons to invest in multi car insurance is the discount that it offers on the premium. You can save several hundred pounds by insuring numerous cars under one policy. If you don’t get the deal you were hoping for when you enquire about a multi insurance policy then haggle. Most insurers will be willing to increase the discount if you are insuring a number of cars with them.
Simple process. With a multi car insurance policy you only have one set of paperwork to complete. There’s only one renewal date for the policy and you only have to worry about making one set of payments. This can make organising car insurance a lot less hassle. Rather than individual policies, each with their own papers to sign and payments to cover, a family of cars can be covered in one go. If you’re a parent then this brings the benefit of knowing that everyone driving a car and living at home is insured.
The more cars you add, the better the discount. Multi car insurance works better when there are more cars. You could save up to 20% if everyone in the household is insured on one policy and you have more than two cars. This is because it’s more beneficial for insurers to offer a discount and sign up the whole family than to have only one policyholder insuring their car with them. As many of us stay with the same insurer for years, these companies are willing to offer discounts to create a new generation of customers.
Different drivers is fine. The only requirement for multi car insurance is that the cars are registered at the same address. It makes no difference if the car has different main and named drivers.
The cons of multi car insurance
One renewal date. When you’re insuring with multi car insurance then all the car insurance policies in the house suddenly have the same renewal date. Not only that but the premium you need to pay will be significantly larger. If you’ve been used to spreading out the payments for different policies this can come as something of a financial shock. So, if you’re considering switching to a multi car insurance policy, make sure you factor this into budgets.
Discounts can vary. It’s worth shopping around as some multi car insurance policies don’t offer particularly impressive discounts. You should note that those homes with just two cars, for example, won’t see such a huge discount. It’s still a good idea to look at individual policies for your household cars. Depending on factors such as where you live and how many cars you have, individual policies might still be cheaper.
Risk assessment. The insurance premium you pay is based on a risk assessment of everyone being covered. So, if you have someone in the household who counts as high risk this can really push the premium up. High-risk drivers are those who have accidents or incidents in their driving history. Very young or very old drivers are also considered to be high risk. Traffic violations, driving under the influence or never having had insurance before can also make a high-risk driver. If there is a high-risk driver in your household then separate insurance policies might be the smarter way forward.
Some drivers won’t be covered. Some insurance companies simply spike the price for high-risk drivers. Others won’t offer any cover at all if a driver has problems such as driving under the influence. It’s important to make sure that you have all the information on those covered under the policy before you buy it. Anything that is withheld could cause serious issues further down the line. In a worst case scenario, an insurer may simply refuse to pay out.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley