You may want to purchase two separate car insurance policies if you need a specialized insurance product like classic, commercial or rideshare insurance, or if you own multiple cars in different states. That said, it’s usually more cost-effective to add a driver or extra coverage to your existing policy.
What is dual car insurance?
Dual car insurance is when two policies cover the same vehicle. Some providers don’t allow this, but it’s technically legal.
Dual car insurance isn’t recommended because it leads to coverage overlap and can cause confusion if a claim is filed.
Purchasing two car insurance policies on the same vehicle is known as double coverage or dual insurance, and it usually happens by accident. If you buy a new plan and forget to cancel the old one, call your provider to cancel and ask for a refund of your unused premium.
When dual car insurance may or may not make sense
- Can I buy two policies for one car in one household? Yes. While you can always buy a second policy with specialized coverage for a commercial or ridesharing vehicle, it’s usually cheaper to switch to a provider that lets you customize your general policy.
- Can I have two insurance policies on two cars in different states? Yes, as you should insure and register your car in the state where it is primarily parked.
- Can I buy two policies for one car I drive between different households? You can usually buy two policies from two different providers for the same car, but since its primary garaging address remains the same, you won’t save on insurance rates by being in one ZIP code.
- Can I buy two policies for one car with several drivers? It’s legal to buy two policies from two different providers for the same car, but you can’t buy a separate policy for each driver. Most policies typically require that you list all of the drivers in the household.
- To prevent a driver from affecting your insurance rates, they must live at a different address or be specifically excluded from coverage — but keep in mind, that’s not an option in every state.
- Can I buy a second policy for a new vehicle? If your new car has different coverage needs than your current vehicle, you may consider a separate insurance policy.
- Can I buy two policies for a luxury, exotic or classic car? Yes, if you own a luxury vehicle needing specialized coverage, consider a separate insurance policy.
Learn more: How to add a new car to your insurance policy
Rules for having dual insurance
If you do find that you need two separate policies, there are several important things to remember.
- Count every driver: Each car insurance policy typically lists every person of driving age in the household.
- Follow purchasing rules: In some states, only the vehicle owner or co-owner can purchase car insurance, and the vehicle must always be insured in the same state where it’s registered.
- Take advantage of permissive use: Friends can borrow your car and benefit from your coverage with permission, but most providers limit the allowed number of “permissive uses” per year. Check your policy to see how many times you’re allowed to lend your car to someone before being required to add them to your policy.
- Use separate companies for separate policies: No insurance provider will insure the same car twice.
You can’t get two payouts from two policies
You aren’t entitled to two payouts even if you’re paying two premiums on the same car. Called unjust enrichment, this legal principle refers to a situation where one party has been unfairly enriched at the expense of another.
The insurance industry cross-checks and records claims in a shared database called the Comprehensive Loss Underwriting Exchange (CLUE), making it easy to catch identical files during the claims process.
Filing a pair of insurance claims for the same accident is a type of insurance fraud known as double-dipping. This constitutes unjust enrichment, as you are attempting to profit from a single loss by receiving compensation from multiple insurers.
This is a serious offense with significant legal and financial consequences, potentially including fines, policy cancellation and criminal charges. In some cases, you may even face jail time. Furthermore, future car insurance providers may refuse to insure you, or if they do, they may charge you significantly higher premiums.
Two car insurance policies may not be the best idea
There are two drawbacks to paying for multiple car insurance policies from different insurance companies.
- Every person of driving age within your household must be listed on each policy, so you’re effectively paying twice the car insurance premiums for everyone.
- If you have two different insurance providers, the adjusters may disagree over who should pay a claim, which can lead to insurance payout delays.
We’ve identified four common reasons for potentially thinking you need two policies that you should be able to solve with one single policy:
| Reason for a second policy | How one policy covers |
|---|---|
| Adding a new driver | Adding a driver to your existing policy lets a household member benefit from your coverage without buying a separate plan. |
| You have a classic car | Classic car insurance matches your vehicle’s appraised value, not its average market value. Some traditional auto insurance companies offer this option. |
| Having multiple cars | Also known as family insurance, adding a second car to your current policy provides similar savings to adding a driver. |
| Rideshare work | You can often purchase rideshare coverage as an add-on, which lets you carry the same coverage on the job and in your personal life. |
Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.
Everett Cook is an award-winning journalist and editor with more than 10 years of experience across a variety of industries. In editing for Jerry, Everett’s mission is to help readers have a better understanding of the costs of owning or leasing a car and to better understand their vehicle in terms of insurance and repairs. Prior to joining Jerry, Everett was an editor for Axios. His previous work has been featured in The New York Times, The Los Angeles Times, The San Francisco Chronicle, The Atlantic, Atlantic Re:think, The Boston Globe, USA Today, and others. He’s also been a freelance writer and editor with experience in SEO, audience building, and long-term content roadmaps. Everett is a proud graduate of the University of Michigan.
