29 August 2024
What is multi car insurance? How it works and more
6 minutes
Multi car insurance is a possible option for households with two or more cars. In this guide, we’ll define it, talk you through how it works, and offer some pros and cons. So, what is multi car insurance? Let’s dive in.
What is a multi car insurance policy?
Multi car insurance is a type of cover that lets you insure two or more vehicles together. It works a lot like standard car insurance — the key difference is that your cars are insured by the same provider under one policy. And most insurers will offer a discount for multi car insurance, so it can work out cheaper than everyone having separate cover.
With around a third of UK households owning two cars or more, multi car insurance is a possible route for many homes. But is it an option for you?
Are you eligible for multi car insurance?
To be eligible for multi car insurance, you need to have two or more cars registered at the same address. That’s it! Most insurance companies will let you add up to five cars under one policy, and even more drivers — in some cases as many as 12.
So multi car insurance is particularly suitable for couples, families, and individuals who own multiple vehicles. But it can work well for anyone sharing a home, even if they’re not related, for example students and housemates.
Types of multi car insurance
There are two types of multi car cover: linked policies or a single policy. Linked policies treat your cars individually, so you can have different levels of cover and excess for each vehicle. You can also have different renewal dates. A single policy treats your cars all the same, so they’ll usually have the same cover and the same renewal date.
Key features of multi car insurance
As with all types of insurance, how it works and what exactly is included will be different depending on which provider you choose. But there are some key features that tend to be part of multi car insurance.
Discounts and savings
- Multi car discounts. One of the main draws of multi car insurance is that providers will usually offer discounts on these policies. Often, you’ll get an increased discount for each additional car you add to your policy. This can really stack up and create some big savings, sometimes up to an extra 10% with every vehicle.
But why do they do this? Well, they want to encourage you to insure more cars with them. So the discount is your reward for your loyalty, effectively choosing them as your provider multiple times.
- No-claims bonuses. Another great thing about multi car insurance is that you can still build up a no-claims bonus for each vehicle. This means you could have multiple no-claims bonuses under one policy, each helping to lower your premiums.
Types of coverage available
Like with standard car insurance, multi car insurance lets you choose the type of cover you’d like, as well as the level of excess you’re willing to pay. With linked policies, this doesn’t even have to be the same across all your cars. You could choose a different type of cover and a different level of excess for each vehicle if you wanted to.
There are usually three types of cover available: third party (which is the minimum required in the UK); third party, fire, and theft; and comprehensive insurance. It’s up to you to decide which type suits you and your vehicles best.
Most policies will also offer a whole host of different add-ons to choose from, for example breakdown cover and protection for your no-claims bonus. So if you’re happy to pay a bit extra, you can get even more protection. And with linked policies, the add-ons you choose can often be different for each vehicle. Just remember your multi car discount probably won’t apply to add-ons.
How does multi car insurance work?
Thankfully, most providers have made it pretty straightforward to take out a multi car insurance policy.
How to apply for multi car insurance
You’ll need to provide a few details to take out a policy, including:
- Personal details: Names, ages, and addresses for each driver
- Vehicle details: Make, model, age, and mileage of each vehicle, plus insurance renewal dates
- Driving history: Past claims and offences
- Insurance requirements: Cover, excess, and optional add-ons
How to manage your multi car policy
One common question about multi car insurance is how to bring all your cars under one policy if they currently have different providers and insurance cover.
Lots of insurers will offer you a staggered approach. This means you can take the policy out with just one car to start with, and then add on the remaining cars when each comes up for renewal. You should still get your discount with the first car because your provider knows it’s a multi car insurance policy — plus any further discounts when more cars are added after that.
If you’re taking out a single policy where all renewal dates are the same, insurers will help you sync these up. During your first year, each additional car will only be charged for the months it’s insured, so you don’t have to pay cancellation fees on your old policies. For example, if you took out a multi car policy for your car on 1 January and then added your partner’s car on 1 July, you’d only have to pay six month’s worth of insurance for your partner’s car. Then each car would renew on 1 January the following year, and you’d start paying the annual amount for both.
If an insurer won’t let you stagger your vehicles, you could take out temporary car insurance for the ones that renew sooner, and then switch to an annual multi car policy once the final vehicle comes up for renewal. But in that case it might be cheaper to just stick with standalone insurance.
Can I drive any car multi car insurance?
Or can everyone on the policy drive each other’s cars? This will depend on how you’ve set up your cover. Each vehicle will have one policyholder who’s the main driver. You can be the main driver for more than one vehicle, but each vehicle can only have one main driver. However, you can add named drivers to each vehicle as well. You can drive any car where you’re either the main or a named driver.
For example, Anna, Steph, and Nick own four cars between them. Anna is the main driver for two cars and a named driver on both Nick and Steph’s cars, so she can drive all four vehicles. Steph is the main driver for her car and a named driver on Nick’s car, so she can drive two vehicles. Nick isn’t a named driver, so he can only drive his own car.
Pros and cons of multi car insurance
Multi car insurance can be a really great option for lots of households. But as with any insurance policy, there are various pros and cons to weigh up. Your specific circumstances will ultimately determine whether it’s the right option for you. Check out our blog for a more thorough look at the pros, cons, and whether multi car insurance is worth it.
Benefits of multi car insurance
- Cost-effective: Is multi car insurance actually cheaper? Thanks to multi car discounts, this type of insurance can be cheaper than insuring each car separately. This is especially likely if you’re insuring several cars, as the more vehicles you add, the greater your discount tends to be. But don’t automatically assume it’s the more cost-effective option. It’s worth comparing multi car quotes against separate quotes for each car to make sure it does actually work out cheaper.
- Convenient: Taking out insurance can sometimes feel like a bit of a faff. Multi car insurance helps make the process smoother by bringing all your cars under one policy. This means you only have to think about one insurance provider, one policy, one payment, and one renewal date (depending on your policy type).
- No-claims bonuses: You might be wondering what happens to the other vehicles if one car has to make an insurance claim, for example due to an accident. Well, the good news is usually nothing! Because each car can have its own separate no-claims discount, the bonuses of any other cars on the policy normally won’t be affected.
Potential drawbacks of multi car insurance
There’s plenty to shout about with multi car insurance, but that doesn’t mean it’s for everyone.
- Paying for multiple cars: Many people find it useful to have all cars renew on the same date. But this does also mean having to pay for them all at the same time, which can be pricey. And if you can’t afford to pay for them all together at the annual rate, you can choose to pay monthly, but this will usually come with a higher interest rate. In this instance, linked policies — where cars can renew on different dates — might be a better option for you.
- Paying for other drivers and vehicles: Under multi car insurance, you pay one single premium for all the cars on the policy. But this premium is determined by a multitude of factors, including the other drivers and vehicles. This could work out to your disadvantage.
For example, if you’re a more experienced driver, but other people on the policy have less experience or points on their licence, you could end up paying more than you would for your own policy. Similarly, some types of cars, like bigger or modified models, will be in more expensive insurance groups and so bump up premiums more than other types. Be aware of who you’ll be sharing the policy with, and whether it’s really worth it for you.
If it sounds like multi car insurance could be right for you, speak to Howden’s trusted advisors today for more information and a personalised quote.
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