In Ontario, there is no limit to how many vehicles you can own. The most challenging part would be insuring all of them, assuming they are all road-safe. Not only would it likely be costly to insure them all, but most insurance companies will only allow a policy owner to insure up to five vehicles. However, it is common for one household to have two or more vehicles. Sometimes they are owned by one driver or multiple, such as a spouse or roommate. While you could have individual policies for each car, many insurance companies offer a multi-car policy, similar to how you might bundle your home and car insurance together. Let’s discuss how adding a second car to your insurance affects your policy.
If you are in the market for purchasing a second vehicle, you may be wondering which is better, having two individual policies or adding your new car to your current one. Are there any benefits to it? And how much does adding a second car to your insurance cost? Here is all you need to know.
How Much Does Adding a Second Car to Insurance Cost: Frequently Asked Questions
How much does adding a second car to an insurance policy cost?
The truth is there is no set price for adding a second car to your insurance. The cost of adding a second vehicle varies based on many factors; insurance companies have a lot to consider before giving you a price.
However, adding a second vehicle will save you money in comparison to taking out a second policy because many insurance companies offer multi-car discounts. So while your premiums will increase because you are now insuring two vehicles, you can save up to 15% with a multi-car discount.
If both vehicles vary significantly in price, another way to keep your premiums down is by driving the cheaper car as your everyday vehicle and keeping the expensive one as your recreational vehicle. An expensive car costs more to insure because it costs more to replace, so using that one recreationally lowers the vehicle’s risks and, thus, your insurance rate.
Factors to consider for the second car with one primary driver
Your insurance company will want to know what your second car will be used for when there is only one driver. This helps them determine any risks based on how often the second vehicle will be used because the more you drive it, the higher the risk is of being in an accident.
Here are a few other factors your insurance company will consider when adding a second vehicle to your insurance:
● Your insurance record. Any previous claims history or any policy cancellations will be considered.
● Your driving record. They will also look at how long you have been driving and any previous tickets or demerits you have had.
● Your age, gender and location. Each one affects your premiums differently. For example, young drivers cost more to insure than experienced drivers, and women generally have cheaper insurance rates than men. Also, your insurance premiums will cost more if you live in an area with a high crime rate versus a lower crime rate.
● Your vehicles. Your insurance company will assess each vehicle individually for the following:
○ Make, model and year
○ Storage location
○ Cost of repairs
○ Replacement value
What is the cheapest way to insure two cars?
There are a couple of ways to save money when you need to insure a second car. The cheapest way is by adding the second vehicle onto your current policy because you can save up to 15% with a multi-car discount. Another is by shopping around to find the best insurance rate available for multi-car policies.
How does a multi-car insurance policy work?
It is pretty straightforward. A multi-car or multi-vehicle insurance policy works by protecting more than one vehicle.
Anyone with a license living under your roof should be listed on your multi-car policy, such as your partner, your kids or even a roommate, because you never know when someone may need to borrow your car unexpectedly. All vehicles on this policy will share effective and expiration dates, meaning your premiums will be deducted on the date, making it easier for you to keep track.
Each vehicle under your multi-car policy will share liability, personal injury protection and uninsured/underinsured motorist coverages. However, other coverages only need to be applied to specific vehicles, such as comprehensive and collision.
While some individuals would rather have two individual insurance policies, combining your coverage into one multi-car policy can come with several benefits, including discounts on your insurance rates.
What are the requirements for a multi-car insurance policy?
There are a few requirements that must be met in order for you to add a second vehicle to your current policy. Generally, they must meet the following:
● All cars must have the same liability insurance coverage.
● All cars must be used as personal passenger vehicles.
● All cars must be insured with the same insurance carrier.
● All cars must be parked at the same address for the majority of the year.
● All cars must be owned by the policyholder(s).
What are the benefits of a multi-car policy?
While saving up to 15% on your insurance is a great benefit on its own, there are several other benefits to having a multi-car policy. These benefits include the convenience of:
● Paying for only one premium each month/year.
● Dealing with one insurance company.
● Having one policy to keep track of.
● Having one renewal date for all vehicles.
● Customizing your coverages per vehicle (except for liability).
Some policies may include insuring the vehicles your children drive even while they are away at school for part of the year.
Another benefit is that you can bundle more vehicles than just your standard cars and trucks with a multi-car insurance policy, including RVs, boats, motorcycles and snowmobiles. This makes it easier to insure these types of seasonal vehicles, as it can sometimes be challenging to find an insurance company that will insure them.
When should you not add a second vehicle to your policy?
While a multi-car policy sounds excellent due to the savings alone, there are a few situations where you should not add a second vehicle to your policy. These situations include:
● Your second vehicle is for business/commercial use. Commercial use vehicles or cars used specifically for business require commercial auto insurance and will not qualify for your personal auto insurance multi-car discount.
● Your second car is a classic/antique car. Classic and antique cars require a unique insurance policy.
● You are trying to insure a vehicle that does not belong to a household member. If someone is staying with you temporarily, you do not need to add them to your insurance policy, as only licenced individuals who permanently live under your roof can be added. Or if you are borrowing someone else’s car for an extended period, you do not need to add it to your insurance (they should add you to theirs, though!)
How much does it cost to add someone to your policy?
Just like with adding a second car, there is no set price for adding a secondary or occasional driver to your policy. While it does usually result in a modest increase, there are many factors your insurance company will need to consider about the second person.
If the person you are adding has years of experience and a clean driving record, the increase will be fairly minimal, sometimes as low as only a few extra dollars a month. However, if you are adding someone who is young, inexperienced or has several demerit points or tickets on their record, expect the increase to be significant, upward of hundreds of dollars a month.
It also depends on whether you are adding them as a secondary driver or occasional driver. A secondary driver regularly uses the vehicle but less than the primary driver. An occasional driver only uses the vehicle once or twice a week or less. As an occasional driver will use the car significantly less than a secondary driver, your insurance increase would be lower because their risk is lower.