How many cars does your household have – two? That’s not unusual. An increasing number have three or even four. There are a number of reasons why millions of homes across Britain have more than one car parked outside. It could simply be that one adult drivers to work in one vehicle while the other does the school-run-and-supermarket trips in the other. It could be that older children have returned home after studying – they might not yet be able to afford or even rent their own house, but they can maybe run a car.
Then there is the growth in flat-sharing among students and young professionals. But whether you have two or five cars registered to the same address, you could be missing out on a trick if you are insuring them all separately. A number of insurers now offer multi-car insurance policies that cover all the vehicles registered at any one address – and the good news is that everyone involved could cut their costs by up to a third or more. For family groups where just one person is covering the whole bill, there is also the potential benefit of everyone having just one renewal date and one premium. Here, we explain how multi-car insurance policies work and look at how much you could save.
Multi-car insurance explained
Multi-car insurance policies, which can generally be taken out for up to five cars, work in the same way as standard insurance policies – the only difference is that more than one car is protected. In most cases, you can even choose different levels of cover and different excesses for each of the vehicles, which must simply be registered at the same address to qualify.
The 12-month policy generally kicks in on the date that the insurance on the last car in the group is up for renewal, with short-term cover being provided for the other cars in the interim. This means that if you have one car that needs insuring in March, and another that needs cover from June, the multi-car policy for both cars will end the following June (despite the first car being insured from March).
The cost of multi-car insurance
The big discounts available on multi-car insurance policies are the reason most people take out cover of this kind. Many insurers offer 10% off for every car you insure on the same policy, while others will reduce the overall premiums by a third when you add just one extra vehicle. If your housemate drives a Ferrari, or your son has only just passed his driving test, however, you may find that a multi-car insurance policy is not the cheapest option for everyone.
The age and experience of the motorists covered by the policy will have a significant impact on the overall cost. And as all vehicles are assigned to a car insurance group between 1 and 50, with those in group 50 attracting the highest premiums, anyone who shares his or her living space with a powerful sports car owner may also be better off going it alone (or joining with the other members of the household). It is always worth comparing the overall cost with the quotes you get for insuring each vehicle separately as a result.
The main conditions attached to multi-car insurance are that all the cars are registered to the same address and that they are for private use only. But before buying, it is also sensible to check the terms and conditions of the no-claims discount. After all, you do not want to lose your no-claims discounts just because one of the other people on the policy has an accident.
Other features of the cover to check include that you can add cars when their cover comes up for renewal or arrange cover on the same policy should someone in your household get a new car during the term. Finally, remember that just because you are on the same multi-car policy as your Mum, for example, you are not insured to drive her car instead of your own. Motorists on the policy are only allowed to get behind the wheel of one of the other cars involved if they are registered as a named driver for that particular vehicle.