Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Oct 13, 2020

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Here's what you need to know...

  • Carefully consider the coverage you want to purchase on your vehicles
  • It is best to purchase one insurance policy to cover all your vehicles
  • It is possible to purchase two separate insurance policies on the same vehicle

The purpose of automobile insurance is to protect other parties from the costs of injuries to their person as well as property damage resulting from an automobile accident in which you, as the driver, are responsible or liable.

Statistics on uninsured/underinsured motorists based upon claims indicate that in 2012 an average of 12.6 percent of individuals in the United States doesn’t have insurance.

In Oklahoma, 29 percent of drivers had no insurance, whereas in Massachusetts 4 percent of drivers had no insurance.

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Purchasing Separate Automobile Insurance Policies

When buying car insurance, it is possible to purchase two separate insurance policies on the same vehicle.

Two car insurance policies are possible, but your premiums will be higher than necessary.

You may also purchase a separate car insurance policy on each vehicle that you own, but the cost of your insurance will be up to 18 percent more expensive than it needs to be because you forego the discount for multiple cars on one policy.

Here are a few examples:

  • You purchase insurance on one automobile at a cost of $500 per year
  • You purchase insurance on another automobile at a cost of $600 per year
  • Total cost of automobile insurance is $1,100

With a multi-car discount of 18 percent, you can save $190 a year. Your insurance coverage is no higher because insurance policies only cover one car with one limit of insurance.

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Insurance Fraud

Some individuals consider the idea of purchasing insurance from two different companies on the same vehicle with the intent of collecting from both policies in the event of an accident.

Collecting from two different insurance policies for the same automobile will constitute “unjust enrichment” and can lead to criminal charges.

What are my coverage options?

In order to understand your auto insurance policy, have a look at the coverage options below:

  • Liability Insurance – is required in all states pays individuals for injury and property damage that you have caused
  • Personal Injury Protection (PIP) – is no-fault insurance in which the individuals’ own insurance pays for bodily injury to the people involved
  • Uninsured and underinsured motorists’ coverage – pays for your injuries if you are involved in an accident with an individual with no insurance or not enough insurance. Some states require this coverage, but others do not
  • Collision car insurance – pays for damage to your vehicle in a collision with an object or other car. A deductible applies, so consider this deductible carefully. Actual cash value controls the coverage rather than replacement cost
  • Comprehensive insurance – pays for damage to your car from a variety of things, including fire, theft, vandalism, weather, animal-related accidents, and glass coverage. A deductible, too, applies to this coverage
  • Towing – reimburses you for the cost of towing a disabled vehicle to a repair garage
  • Rental reimbursement – pays for the rental of a replacement vehicle when your car is not drivable

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Purchasing Auto Insurance

Carefully consider the coverage you want to purchase on your vehicles. Statistics prove that comparison-shopping can save you a substantial amount of premium costs.

Steps for Purchasing Car Insurance

  1. Choose companies by looking at advertisements, asking friends, and investigating local contacts
  2. Contact your state’s Insurance Department to make certain licensing for the entities is current. Unlicensed agencies and companies very likely will not meet your insurance needs
  3. Determine the limits of liability required by your state. Consult with your state’s Insurance Department or, more conveniently, consult the Insurance Information Institute for basic limits. Recognize that you need to purchase insurance for higher limits than required because state limits were set by legislatures in the past – costs and values have increased
  4. Ask for quotations from at least three of the insurance companies. Consult agents, or use the brief recap of coverage above. Advice is available from the company, agent, or the insurance company
  5. Assess the quotations for coverage, and then proceed to examine each of the insurance companies

Assessing Insurance Companies

Examine the financial situations of each of the companies to determine if they are viable and likely to stay in business. The recent recession has made us all aware of the fragility of a company’s financial situation.

Look at the way the company handles claims by consulting with several sources such as:

It’s not a good idea to purchase several insurance policies to cover each of your vehicles as you will lose the credits for multiple cars. Purchasing two policies on one car wastes your money and leaves you open to charges of insurance fraud if you file two claims.

Purchasing two policies on one car will waste your money and leave you open to charges of insurance fraud.

Insurance companies have a central recording area to evaluate claims, so discovery is almost inevitable. The only exception to this is when a particular state allows liability or underinsured/uninsured motorists coverage to be stacked.

It is best to purchase one insurance policy to cover all your vehicles to save money and to facilitate the settlement of claims.

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